Wedbush Remains Bullish on Covanta Holding (CVA) as Waste Business Continues to Grow

Wedbush reiterated an Outperform rating and $27.00 price target on Covanta (NYSE: CVA) as waste business continues to grow. Analyst Al Kaschalk believes CVA will drive operating improvements and cost reductions associated with its energy from waste (EfW) facilities.

Kaschalk commented, "Covanta remains our top pick as we begin to position for CY16. We believe Covanta Holding Corp. (CVA), a member of Wedbush Securities’ Best Ideas List, will drive operating improvements and cost reductions associated with its energy from waste (EfW) facilities, extend such facilities’ useful lives through timely investment and maintenance repairs, benefit from recent investments in growth initiatives including New York Transit Station (NYTS) while navigating headwinds from lower ferrous and non-ferrous scrap prices related to its metal recycling business (~10% of revenue). As CEO Stephen Jones implements his multi-year growth strategy, near term cost efficiencies and process improvement initiatives are taking hold, and mid-term tuck-in acquisitions and longer-term new plant build could accelerate growth. We continue to believe project growth including plant construction and operating contracts from greenfield facilities outside of North America (United Kingdom /Europe, Australia and Asia) will be target rich areas. Although only one-third of CVA’s energy portfolio is contracted in 2019, the company’s portfolio is exposed to the right market areas (concentrated in Eastern PJM and ISO NE) and is expected to reduce megawatt market exposure as it hedges generation."

For an analyst ratings summary and ratings history on Covanta click here. For more ratings news on Covanta click here.

Shares of Covanta closed at $17.45 yesterday.

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