SRCL - Stericycle: Revenue Recovery And Divestments In The Spotlight

• Stericycle's YoY adjusted revenue decline continued to narrow in 4Q 2020, with its core Regulated Waste and Compliance Services business leveraging on testing- and vaccine-related opportunities.
• Potential upside surprises could come from larger-than-expected divestments and a shorter-than-expected time taken to meet the company's deleveraging target.
• The company's positive 2021 outlook hinges on the re-opening of the economy and the pandemic being contained, and there are concerns about the future prospects of the document destruction business.
• The market values Stericycle at consensus forward FY 2021 and FY 2022 P/E multiples of 27.9 times and 25.0 times, respectively.

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