The Uniti Group Ltd (ASX: UWL) share price has been a major performer this year, surging around 88% year-to-date and 131% in the past 12 months
The Adelaide company, which focuses on the construction of communications infrastructure such as fibre, wireless towers and ground leases, is also intertwined with Australia's National Broadband Network (NBN) rollout.
Let's have a look at what Uniti Group has been up to recently.
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ASX 200 inclusion
Only 2 years after listing, Uniti was added to the ASX 200 in early June. Uniti shares have climbed 3% following this rebalancing of the S&P/ASX 200 Index (ASX: XJO).
Since its inclusion, the 20-day average trading volume in Uniti shares has increased to more than 4 million shares changing hands daily.
Uniti has outpaced the ASX 200's 12-month return, climbing 131% versus the index's 23% during the same period.
NBN Co and broadband pricing
On June 7 2021, NBN Co released its views on future wholesale broadband pricing in a proposal to amend long-term NBN pricing options.
In the paper, NBN Co demonstrated it has considered indexing broadband prices "above the level of inflation" if low usage hurts the company's revenue.
Uniti operates one of Australia's largest open access broadband networks, and the company's share price has climbed northwards by 7% following the paper's release, jumping from $3.07 to $3.29 at pre-market today.
What do analysts say?
Analysts from firm JP Morgan Chase & Co assigned a buy rating on Uniti Group shares on 18 June, citing the above proposal and the impact of potential NBN pricing amendments to the company:
"In our analysis of NBN's proposed pricing constructs, we estimate wholesale prices will increase by a minimum of 13% by mid-2023."
"We view Uniti as a beneficiary of the wholesale price increases as it utilizes NBN's pricing card for its own wholesale network."
Analysts pointed to Uniti's "leverage to the Australian domestic housing market and the company's near certain growth from upcoming contracted construction."
The analysts assigned a price target of $3.45 per share in an updated report to investors on 23 June.
At the current share price of $3.29, this implies an upside potential of more than 4%.
Uniti Group share price snapshot
Uniti Group shares have gained 86.65% during the previous 6 months. They've posted almost 10% in the previous month.
This has outpaced the ASX 200's 8.88% return over the same 6-month period.
At the time of writing, Uniti Group Ltd has a market capitalisation of $2.27 billion and a price-to-earnings ratio (P/E) of 78.1.
