Wedbush Starts Covanta (CVA) at Outperform; Growth Catalysts and Under-Leveraged Balance Sheet
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Price: $20.26 --0%
Rating Summary:
9 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
9 Buy, 9 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Wedbush initiates coverage on Covanta (NYSE: CVA) with an Outperform. PT $18.00.
Wedbush analyst said, "Our rating on shares of Covanta is predicated on the following key points: (i) the majority of its waste and energy services revenues is contracted and provides stable, annuity cash flow streams; (ii) organic growth drivers, including the 4th “R”, are expected to contribute in 2012 and beyond; (iii) the recent slide in natural gas prices from unseasonal weather in the Northeast warrants caution but, in our view, is not reflective of a change in fundamentals; and (iv) project pipeline development remains a long-term driver but we look for management to use its unlevered balance sheet and discretionary cash flow to provide the means to accelerate the Board’s directive to drive shareholder returns. With the shares providing a FCF yield of 16+%, we believe the shares offer a favorable risk/reward profile ahead of potential project development wins over the next 18 months."
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 $14.74 yesterday.
Wedbush analyst said, "Our rating on shares of Covanta is predicated on the following key points: (i) the majority of its waste and energy services revenues is contracted and provides stable, annuity cash flow streams; (ii) organic growth drivers, including the 4th “R”, are expected to contribute in 2012 and beyond; (iii) the recent slide in natural gas prices from unseasonal weather in the Northeast warrants caution but, in our view, is not reflective of a change in fundamentals; and (iv) project pipeline development remains a long-term driver but we look for management to use its unlevered balance sheet and discretionary cash flow to provide the means to accelerate the Board’s directive to drive shareholder returns. With the shares providing a FCF yield of 16+%, we believe the shares offer a favorable risk/reward profile ahead of potential project development wins over the next 18 months."
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 $14.74 yesterday.
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