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On Monday, Jefferies updated its outlook on Casella Waste Systems (NASDAQ:CWST), increasing the price target from $113.00 to $118.00, while maintaining a Hold rating on the stock. The revision follows the company’s recent earnings report, which showed revenue and EBITDA surpassing consensus estimates by approximately 3%. The performance boost was attributed to strong pricing strategies and incremental benefits from mergers and acquisitions, although volumes were reported to be lower than anticipated. The company’s impressive revenue growth of 21.6% over the last twelve months reflects these successful strategies. According to InvestingPro data, the stock is currently trading near its 52-week high of $120.69, with a market capitalization of $7.4 billion.
Casella Waste’s financial results for the quarter reflected effective execution in pricing and strategic growth through acquisitions. Despite the softer volume numbers, the company’s revenue and EBITDA exceeded market expectations, indicating a robust business model. Analysts at Jefferies believe that the company’s guidance for the future is conservative, suggesting there could be additional upside from further M&A activities and improved pricing, along with a potential sequential increase in volumes.
The updated price target takes into account the potential for Casella Waste to continue benefiting from these positive factors. However, the Hold rating suggests that Jefferies analysts see the stock as fairly valued at its current levels. They note that Casella Waste’s stock is trading at approximately 42 times free cash flow per share, which is higher than the average of its peers, trading around 28 times. This aligns with InvestingPro’s Fair Value assessment, which indicates the stock is currently overvalued. InvestingPro subscribers have access to 13 additional key insights about CWST, including detailed valuation metrics and growth indicators.
Jefferies’ stance indicates that while they acknowledge the company’s solid quarterly performance and prospects for growth, they also consider the current stock valuation to reflect the anticipated benefits. The firm’s analysts have reiterated their Hold rating, implying that they do not see a compelling reason to change their investment stance at this time.
The financial community will be watching Casella Waste Systems closely to see if the company can maintain its growth trajectory and whether the stock’s valuation will adjust in response to the company’s performance and market conditions. The increased price target from Jefferies represents a modest expectation of the stock’s potential to climb higher, balanced against a market valuation that may already account for its growth prospects. With analyst targets ranging from $95.22 to $140.00, investors seeking deeper insights can access CWST’s comprehensive Pro Research Report, available exclusively on InvestingPro, which provides detailed analysis of the company’s valuation, growth potential, and financial health metrics.
In other recent news, Casella Waste Systems Inc. reported strong financial performance for the first quarter of 2025, with earnings per share (EPS) reaching $0.19, significantly surpassing the forecasted $0.03. The company’s revenue also exceeded expectations, coming in at $417.1 million compared to the anticipated $404.02 million, marking a 22.3% increase year-over-year. Despite these positive results, the company’s stock experienced a minor decline, closing slightly lower. Casella reaffirmed its financial guidance for 2025, maintaining its pricing guidance at approximately 5% and highlighting an active mergers and acquisitions pipeline exceeding $500 million in revenues. Additionally, the company completed four acquisitions year-to-date, contributing approximately $50 million in annualized revenues. Analyst firms did not report any upgrades or downgrades for Casella Waste Systems during this period. The company continues to focus on operational efficiencies, with a notable emphasis on internalizing more of its landfill volumes and expanding its fleet automation initiatives.
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