Uniti's Strong Business Hardly Moves the Needle With Windstream Lease Locked In

Uniti reported a strong fourth quarter, and management said the fiber leasing environment is very strong. However, even with fourth-quarter results and 2022 guidance coming in slightly ahead of our expectations, the difference is minimal considering that more than 70% of revenue and 90% of EBITDA are essentially fixed due to Uniti's sale-leaseback agreements, with Windstream accounting for the bulk of that segment. Management once again highlighted the value it thinks Uniti’s network has, indicating that it has explored ways to unlock value, including splitting up the company. We don’t expect much change to the status quo for its business and are maintaining our $12 fair value estimate.