Waste Connections Inc. (WCN) PT Raised to $93 at Wedbush Following Positive 4Q Results; 'M&A Tailwinds'

Wedbush analyst Al Kaschalk reiterates Outperform rating and raises price target on Waste Connections Inc. (NYSE: WCN) to $93 (from $85), noting high operational performance and favorable M&A environment, as the company reported 2016 fourth quarter revenue and adjusted EBITDA above consensus estimates.

Kaschalk comments, "We continue to view Waste Connections’ (WCN) favorable franchise market structure as well as its focus on secondary markets as significant barriers to entry driving high cash flow conversion on an incremental ton of municipal solid waste. We look for WCN to benefit from core price-volume growth discipline and optimization of the Progressive Waste (Progressive) assets. We are comfortable with low-mid-single-digit top-line organic growth along with leading cash flow conversion as reasons for shares to remain a core holding in Small-Mid Cap growth portfolios. Furthermore, we remain confident in capital allocation decisions including further strategic acquisitions with net debt/EBITDA leverage ratio below 3.0x. 4Q revenue of $1.049 billion and AEBITDA of $325.4 million beat our estimates as top line exceeds internal budgets by ~3%. In part, revenue quality was better than management had feared while higher core price, volumes and recycling prices all beat our estimates… 2017 M&A environment should be favorable and WCN is likely to see additional transactions aggregating in excess of $125 million in revenue."

You May Also Be Interested In

• Correction: Citi Upgrades Sirius XM Radio (SIRI) to Neutral
• Deutsche Boerse AG (DB1:GR) (DBOEY) PT Lowered to EUR184 at Citi
• Kering SA (KER:FP) (PPRUY) PT Lowered to EUR430 at RBC Capital