Wedbush Maintains Bullish View on Waste Connections (WCN)

Wedbush analyst Al Kaschalk reiterated an Outperform rating and $53 price target on Waste Connections Inc. (NYSE: WCN) following mixed Q1 results.

Kaschalk commented, "Reiterate OUTPERFORM as management muddles through MSW weather to drive Adj. EBITDA margin 20bps above our estimate. While our estimates and rating are under review, we are currently reaffirming our positive relative stance on shares of Waste Connections (WCN) following Q1 results that saw EBITDA margin top our consensus estimate by 20bps. Results did fall short of our above consensus revenue and Adjusted-EBITDA (AEBITDA) expectations, leading to a non-GAAP EPS that was a penny shy of our estimate. MSW tons were up 3% with notable strength in the commercial service line and was able to offset a 13% decline in same-store traffic within the E&P segment. Despite fewer operating efficiencies due to weather, cost controls helped WCN deliver 33.3% EBITDA margin, or 20 bps above our consensus estimate. In terms of near-term outlook, we look for management to dial back Q2 estimates within E&P as same-store sales are now expected to trough in Q2:CY15 (versus Q1:CY16 previously). During Tuesday's conference call, we expect management to articulate the strength within the solid waste business is helping to offset the E&P decline suggesting approximately 3% decline to CY15 consensus AEBITDA estimates. Accordingly, we expect the shares to trade down when it opens for trading on Tuesday after the earnings call."

For an analyst ratings summary and ratings history on Waste Connections Inc. click here. For more ratings news on Waste Connections Inc. click here.

Shares of Waste Connections Inc. closed at $46.14 yesterday.

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