Uniti Group (UNIT) Stock Forecast & Price Target

Uniti Group is poised for growth following its merger with Windstream, which will expand its fiber network to a total of 217,000 route miles and enhance its customer base to 4.3 million households and 150,000 commercial buildings. The company has demonstrated strong financial performance, with UnitiFiber revenue increasing by $5.4 million year-over-year to $77 million and adjusted EBITDA rising to 6.2x, exceeding targets and reflecting strong operational efficiency. Management's upward revision of revenue guidance to $1,167 million, driven by confidence in hyperscaler demand and robust activity in various verticals, further supports a positive financial outlook for the combined entity.

Uniti Group faces a negative outlook primarily due to the lowered guidance for annualized funds from operations (AFFO) per share, which was adjusted to a midpoint of $1.37 from a previous $1.40, reflecting the impact of increased debt issuance. Furthermore, the company's heavy reliance on Windstream for revenue raises concerns about credit agency assessments and the potential challenges arising from the upcoming merger, particularly in the context of macroeconomic conditions that may affect capital availability and costs. Additionally, limited management equity ownership could hinder investor confidence in alignment of interests, while the anticipated shift towards residential telecom services introduces competitive risks in less populated markets.