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On Friday, Oppenheimer analysts maintained their positive stance on Republic Services (NYSE:RSG) stock, reiterating an Outperform rating and a $262.00 price target. The $75.2 billion waste management company’s first-quarter performance for 2025 surpassed Wall Street’s adjusted EBITDA and EPS expectations, driven by strong pricing and margin results that compensated for a decline in volume-related revenue. InvestingPro data shows the stock trades at a P/E ratio of 37.1x and has achieved a perfect Piotroski Score of 9, indicating strong financial health.
Republic Services’ management team confirmed its financial outlook for the full year 2025, staying on course with previously set guidance. The company achieved a significant underlying margin expansion of 110 basis points, excluding the impact of workdays. With annual revenue of $16 billion and an impressive gross margin of 42.8%, this growth was attributed to a favorable price-cost spread. Although comparisons are expected to become more challenging, the results of the quarter suggest that Republic Services is well-positioned to potentially outdo its margin projections for the year.
The firm’s sustainability investments, including initiatives in circular polymers and renewable natural gas (RNG), are progressing according to plan. These efforts are in line with the company’s timelines from the previous quarter. Additionally, with a robust and balanced merger and acquisition pipeline, analysts at Oppenheimer believe that Republic Services has a high chance of surpassing its targeted annual expenditure of $1 billion.
In light of the recent performance and strategic developments, Oppenheimer has updated its estimates for the company while maintaining the $262 price target. The positive outlook reflects confidence in Republic Services’ ability to continue delivering on its financial and operational goals, as well as its commitment to sustainability and growth through strategic acquisitions.
In other recent news, Republic Services reported its first-quarter earnings, surpassing analyst expectations with adjusted earnings per share of $1.58, compared to the projected $1.56. However, the company’s revenue fell short of forecasts, coming in at $4.01 billion, below the anticipated $4.08 billion. Despite the revenue miss, Republic Services achieved a 3.8% year-over-year growth, driven by a 4.5% increase in average yield, although this was partially offset by a 1.2% decrease in volume. The company’s adjusted EBITDA margin improved to 31.6% from 30.2% in the previous year, reflecting effective cost management and pricing strategies. Additionally, Republic Services generated $727 million in adjusted free cash flow during the quarter. The company maintained its full-year 2025 adjusted EPS guidance range of $6.23 to $6.38 and expects revenue growth between 3.75% to 5.25% for the year.
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