Gold prices hold sharp gains as soft US jobs data fuels Fed rate cut bets
On Wednesday, Oppenheimer analysts adjusted the price target for Clean Harbors (NYSE:CLH) shares, lowering it slightly to $254 from $256, while maintaining an Outperform rating. The revision followed the company’s trading performance on Wednesday, which saw a decline despite Clean Harbors surpassing fourth-quarter 2024 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) and FCF (free cash flow) consensus estimates. According to InvestingPro data, the company currently trades at a P/E ratio of 27.85x, with analyst targets ranging from $250 to $325.
The company provided financial guidance for fiscal year 2025 with EBITDA and FCF midpoints that were approximately 2% below market expectations. However, Oppenheimer analysts noted that the Environmental Services (ES) segment’s mid-single-digit organic growth trends are expected to continue into FY25. Supporting this outlook, InvestingPro analysis shows Clean Harbors maintains strong financial health with a current ratio of 2.1 and moderate debt levels. The analysts highlighted several positive aspects, including year-over-year comparable price and mix expectations, an elevated deferred backlog, a healthy project pipeline, and the on-schedule progress of the Kimball ramp.
Despite the potential for increased seasonality in the second half of the year due to a softer first quarter, influenced by weather impacts and pricing and inventory adjustments in the Safety-Kleen Sustainability Solutions (SKSS) segment, the analysts believe that the FY25 guidance sets a conservative benchmark. This includes modest growth expectations for the Emergency Response (ER), PFAS (Per- and polyfluoroalkyl substances) treatment, and Technical Services segments.
The report also pointed out that Clean Harbors has a strong position to create shareholder value through capital allocation. The company’s deleveraging trajectory and the possibility of accretive mergers and acquisitions (M&A) are seen as potential drivers for positive revisions in FY25. The analysts concluded that the recent pullback in share price presents an investment opportunity, stating, "We take our PT to $254 (from $256), while viewing the pullback as an opportunity."
In other recent news, Clean Harbors reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $1.56, which exceeded analysts’ expectations of $1.36. Despite this earnings beat, the company’s revenue slightly missed projections, coming in at $1.43 billion compared to the anticipated $1.44 billion. The company’s full-year 2024 performance was strong, with an 11% increase in revenue and a 10% rise in consolidated EBITDA. Looking ahead, Clean Harbors provided optimistic guidance for 2025, projecting adjusted EBITDA between $1.150 billion and $1.210 billion. The company plans a $15 million investment in its Phoenix expansion and expects adjusted free cash flow between $430 million and $490 million. Analyst firms like Raymond (NSE:RYMD) James and Oppenheimer have shown interest in the company’s strategic initiatives, such as the Kimbell incinerator project, which is expected to contribute significantly to future earnings. Clean Harbors is also actively evaluating acquisition opportunities to support its growth plans. These recent developments reflect the company’s ongoing efforts to strengthen its market position and operational efficiency.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.