UPDATE: Goldman Sachs Upgrades Republic Services (RSG) to Conviction Buy
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Goldman Sachs analyst Jerry Revich upgraded Republic Services (NYSE: RSG) from Buy to Conviction Buy with a price target of $147.00 (from $138.00).
The analyst comments "We reiterate our Buy rating on RSG and add it to the Conviction List with +20% upside to our new $147, 12-month price target. We see significant scope for accelerating unit profitability and high returns green capex to drive positive earnings revisions and multiple expansion for the stock. RSG was the last major Environmental Services company to meaningfully accelerate pricing in 2015, as the company made the difficult decision to shed low margin business while transitioning the portfolio away from CPI-linked contracts. Increasing consolidation also contributed to the positive inflection in pricing, with solid waste majors adding ~5% to public company revenue per year via acquisition. As a result, RSG's yield is running at +2.6% this year compared to +0-1% in year one of the last recovery. Today, RSG's unit profitability is up +27% compared to 2015, and with volumes also recovering off trough (IP and commercial reopening), we see potential for double digit unit profitability improvement for RSG in 2022E. We are also Buy-rated on WM, WCN and GFL within our Environmental Services coverage."
Shares of Republic Services closed at $121.58 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments, Hot Upgrades, Upgrades
Related EntitiesGoldman Sachs Conviction Buy List, Goldman Sachs, Earnings, Definitive Agreement
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