Zacks Investment Research upgraded Crown Castle International (CCI -Analyst Report) by a notch to a Zacks Rank #2 (Buy) on Sept 30, 2014.

Why the Upgrade?

Higher usage of smartphones and tablets and increased deployment of 4G LTE networks have propelled demand for tower requirement by large carriers. Moreover, the acquisition of NextG Networks Inc. (which comprises 7,000 Distributed Antenna Systems) and the purchase of 7,200 wireless towers from T-Mobile US, Inc. (TMUS - Snapshot Report) have positioned Crown Castle as the largest wireless tower operator in the U.S. 

In the meantime, Verizon Communication Inc. (VZ - Analyst Report) has initiated the deployment of Voice over LTE (VoLTE) services which will further boost data consumption. Moreover, growing demand for connected car services coupled with machine-to-machine applications will drive network traffic. 

Thus, these positive factors coupled with AT&T Inc.’s (T - Analyst Report) decision to cover 90% of its LTE network build out by the end of this year will further lend support to its top line. Also, the company is positioned to significantly gain from its business in Australia as carriers in the nation are executing network upgrades. The installation of a national broadband network in Australia should also prove accretive to the company.

Debt wise, Crown Castle will have to repay a lower amount scheduled to mature before 2017 which will help the company gain financial flexibility and fund tower and land acquisitions over the next four years. Meanwhile, the company raised its guidance for fiscal 2014.

In the recently concluded second quarter of 2014, Crown Castle’s top line witnessed strong 25% year-over-year growth and the figure also surpassed the Zacks Consensus Estimate.