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On Monday, Jefferies analyst Stephanie Moore increased the price target on GFL Environmental shares (NYSE: NYSE:GFL) to $55.00, up from the previous $52.00, while maintaining a Buy rating on the stock. The company, currently valued at $18.46 billion, is trading near its 52-week high of $48.87, with InvestingPro analysis suggesting the stock is slightly overvalued at current levels. Following the GFL Investor Day, Moore expressed a heightened optimism about the company’s prospects. She noted that the management’s presentation was straightforward and realistic, with an emphasis on the simplicity and achievability of the company’s plans.
Moore’s confidence in GFL Environmental is bolstered by the company’s conservative guidance on revenue, EBITDA, and EBITDA margin, which she believes provides several opportunities for the company to meet or surpass expectations. The company has demonstrated solid performance with revenue growth of 4.61% over the last twelve months. According to Moore, GFL Environmental has multiple strategies at its disposal to achieve its financial targets.
The analyst’s commentary underscores the potential for GFL Environmental to outperform its own financial projections. While the company wasn’t profitable in the last twelve months, InvestingPro data shows analysts expect profitability this year. Moore’s assessment indicates that the company’s guidance may be understated, suggesting room for positive surprises in its financial performance.
GFL Environmental’s Investor Day appears to have successfully conveyed a narrative of growth and operational efficiency, leading to Jefferies’ reaffirmation of a Buy rating for the stock. The strong market confidence is reflected in the stock’s impressive 35.03% return over the past year. For deeper insights into GFL Environmental’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro. Moore’s remarks highlight the company’s status as a leading, well-managed player in its sector.
The revised price target of $55.00 represents Jefferies’ confidence in GFL Environmental’s ability to execute its business strategy effectively. The endorsement from Jefferies suggests that investors might expect GFL Environmental to continue its trajectory of steady growth and financial discipline.
In other recent news, GFL Environmental has reported significant financial developments and strategic moves. The company concluded fiscal year 2024 with strong fourth-quarter results, showing solid waste price and volume growth that surpassed expectations, contributing to a 300 basis point increase in adjusted EBITDA margins to 29.1%. Stifel responded by upgrading GFL Environmental’s stock rating from "Hold" to "Buy," maintaining a price target of C$85.00, citing the company’s robust performance and optimistic forecast for 2025, projecting revenue growth of 7.2% to C$8.425 billion. Meanwhile, Citi initiated coverage with a Buy rating and a price target of $53.00, reflecting confidence in the company’s prospects.
Additionally, GFL Environmental announced the sale of its Environmental Services segment for C$8.0 billion, a move praised by Raymond (NSE:RYMD) James, which maintained an Outperform rating and a $50.00 price target. The transaction is expected to reduce GFL’s leverage, allowing for increased mergers and acquisitions activity, with the company planning to use proceeds for debt reduction and share repurchases. BMO Capital Markets adjusted its price target to $47.00, maintaining a Market Perform rating, following the announcement of the ES sale deal. Despite a slight adjustment in the price target, the deal’s valuation aligns with expectations, and BMO noted the potential for GFL to repurchase the ES business if it meets medium-term goals.
BMO later raised the target to $48.00, acknowledging potential earnings improvement through self-help opportunities and growth via mergers and acquisitions. Analysts highlighted that these strategic moves position GFL Environmental to enhance its financial metrics and focus on its core solid waste business. The developments indicate a cautiously optimistic outlook from analysts regarding GFL Environmental’s future performance, with several firms expressing confidence in the company’s strategic direction and financial health.
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