KeyBanc Starts Covanta (CVA) at Buy; Free Cash Flow Machine; Recent Headwinds Moderating, Possibly Reversing

KeyBanc initiates coverage on Covanta (NYSE: CVA) with a Buy. PT $20.00.

KeyBanc analyst said, "The combination of abundant and predictable free cash flow, moderating headwinds and an attractive valuation (8.0x CY12E EV/EBITDA) gives us confidence that Covanta will outperform in a flat to down stock market. At the same time, the upside optionality from increased leverage could also drive outperformance in a strong tape. Our price target of $20 assumes Covanta trades at 9x CY12E EV/EBITDA. Key catalysts include a new project win in Europe, an accelerated share buyback program, and/or increasing energy or metals pricing."

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 $16.52 yesterday.

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