American Tower beats earnings but 2026 outlook disappoints
Q4 AFFO crushes estimates while full-year guidance shows muted growth
American Tower Corporation delivered better-than-expected fourth-quarter results but disappointed investors with cautious 2026 guidance, sending shares of the communications infrastructure owner lower despite the strong quarterly performance.
The Boston-based real estate investment trust reported Adjusted Funds From Operations of $2.63 per share for the fourth quarter of 2025, significantly exceeding analyst estimates that ranged from $1.49 to $1.87. Revenue reached $2.74 billion, topping the anticipated $2.68 billion and growing 7.5% year-over-year, while Adjusted EBITDA of $1.82 billion surpassed the $1.78 billion consensus.
However, the company's outlook for 2026 fell short of Wall Street expectations. American Tower projected full-year property revenue between $10.44 billion and $10.59 billion, with the midpoint well below the consensus estimate of $10.959 billion. The guidance represents approximately 2% growth at the midpoint compared to 2025 results.
Perhaps more concerning for investors, American Tower forecast 2026 AFFO per share of $10.78 to $10.95, representing just 1.0% growth at the midpoint. Adjusted EBITDA is expected to be essentially flat, ranging from $7.09 billion to $7.16 billion, due primarily to lower straight-line revenue. The muted growth outlook reflects a maturing business environment after years of robust expansion driven by 5G network deployments.
The company did increase its dividend to an annualized $6.80 per share, representing a 4.9% increase from the prior $6.48 rate. American Tower paid a quarterly dividend of $1.70 per share on February 2, 2026, to shareholders of record as of December 29, 2025. The dividend increase, while modest, signals management's confidence in generating steady cash flow despite the growth deceleration.
Shares of American Tower traded down 0.03% at $190.04 in afternoon trading on Tuesday, giving the company a market capitalization of $89 billion. The stock had rallied approximately 10% ahead of earnings before the guidance tempered investor enthusiasm. The shares remain well below their 52-week high of $230.04 reached earlier in the year.
Despite the near-term challenges, analysts maintain a broadly positive outlook on American Tower. The company currently receives an average rating of moderate buy from Wall Street, with 16 buy recommendations (five strong buy, 11 buy) and seven hold ratings. The consensus price target stands at $217.50, implying roughly 14% upside from current levels.
Individual analyst targets vary widely, reflecting differing views on the company's growth trajectory. UBS maintains the most bullish stance with a $254 price target, followed by J.P. Morgan at $245. On the bearish end, Mizuho set a target of $189 and BMO Capital Markets at $185.
The contrasting quarterly results versus guidance highlights the strategic crossroads facing American Tower. The company reported strong leasing demand across its global tower portfolio and data center business during the fourth quarter, demonstrating continued infrastructure needs from wireless carriers. However, the 2026 guidance suggests that the explosive growth phase of 5G deployments may be slowing, with carriers focusing on optimizing existing networks rather than aggressive new buildouts.
American Tower owns and operates wireless and broadcast communications infrastructure across multiple countries, making it a critical partner for telecommunications companies seeking to expand network coverage and capacity. The company's business model generates steady recurring revenue from long-term leases with multiple tenants on individual towers, providing insulation from economic cycles.
For investors, the key question becomes whether American Tower can successfully navigate the transition from hyper-growth to more mature, sustainable expansion. The modest AFFO growth outlook for 2026 suggests a period of consolidation rather than expansion, though the dividend increase provides some yield support for shareholders willing to hold through the transition.