Waste Connections' (WCN) Strong Price and Volumes Drives 4Q Beat; Wedbush Reiterates Outperform

Wedbush reiterated an Outperform rating on Waste Connections Inc. (NYSE: WCN), and trimmed the price target to $67.00 (from $68.00), following the company's 4Q earnings. Revenue of $531.9 million and adjusted EBITDA of $175.6 million was inline with preliminary results. The better than expected results drove 4Q adjusted EPS two cents above the $0.47 consensus estimate. Results that benefited from higher than modeled Collection and Disposal/Transfer revenue which more than offset 46% decline in the E&P segment.

Analyst Al Kaschalk commented, "We are reaffirming our OUTPERFORM rating on shares of Waste Connections (WCN) following 4Q results that benefited from higher than modeled Collection and Disposal/Transfer revenue which more than offset 46% decline in the E&P segment. This mix drove two-cent adjusted EPS beat while benefit of a lower effective tax rate offset higher-than-expected SG&A and D&A expenses. Looking ahead, management essentially reaffirmed CY16 EBITDA margin of 33.9% driven by a combined 4-5% price and volume growth within Solid Waste Operations (SWO). And as the reverse merger with Progressive Waste (BIN) nears its expected 2Q:CY16 completion, we remain comfortable with the expected value to be generated by the transaction ($50 million in pretax synergies and $48 million from lower effective tax rate) and see additional upside to shares as that value is recognized by the market."

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 $57.48 yesterday.

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