2023-03-30 10:36:38 ET
Waste Management ( NYSE: WM ) and Waste Connections ( NYSE: WCN ) on Thursday were each rated Outperform in new research coverage by analysts at TD Cowen. They also rated Republic Services ( NYSE: RSG ) as a market Perform in their coverage of the three biggest waste-services companies.
“We believe reliable growth and impressive free cash flow margins make this sector very appealing,” according to TD Cowen. “Furthermore, renewable natural gas (RNG) collection from landfills and improved recycling facilities should add incremental earnings over the next three to four years, and we believe this is still underappreciated by the market.”
TD Cowen has a price target of $200 a share on Waste Management ( WM ), $160 a share on Waste Connections ( WCN ) and $150 a share on Republic Services ( RSG ).
TD Cowen coverage of waste services, March 30 | ||
Ticker | Rating | Comments |
WM | Outperform | WM is our top pick as we believe investors have not yet priced in the future benefit from RNG; April 5 Sustainability Day could serve as a catalyst for the stock. |
WCN | Outperform | WCN trades at a premium multiple but we believe it is justified by the highest EBITDA and FCF margins. |
RSG | Market Perform | RSG is solid and well run, but greater exposure to hazardous waste could drag down margins. |
For further details see:
Waste Management, Waste Connections rated Outperform in new coverage by TD Cowen