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Investing.com - Oppenheimer maintained its Outperform rating and $268.00 price target on Republic Services (NYSE:RSG), a prominent player in the Commercial Services industry with a market capitalization of $77 billion, following the waste management company’s second-quarter 2025 earnings report. According to InvestingPro analysis, the stock is currently trading above its Fair Value, with a notable 29% return over the past year.
Republic Services exceeded consensus estimates for adjusted EBITDA and EPS in the second quarter, despite reporting sales below expectations. The company achieved stronger-than-anticipated margin expansion, with solid waste margins improving 120 basis points year-over-year. The company maintains impressive profitability metrics, with a gross profit margin of 43% and a perfect Piotroski Score of 9, as reported by InvestingPro.
The waste management firm reiterated its full-year 2025 adjusted EBITDA and EPS guidance while lowering its sales outlook. However, Republic Services raised its free cash flow forecast above Street estimates, prompting Oppenheimer to modestly increase its free cash flow estimates for fiscal years 2025-2026.
Favorable price-cost dynamics and improved mix were identified as the primary drivers behind the 30 basis points increase in margin expansion guidance. These positive factors more than offset dilution impacts from mergers and acquisitions, recycled commodity pressures, and cyclical volume challenges in environmental services and rolloff segments.
Republic Services continued its diversified capital allocation strategy, spending an additional $129 million on acquisitions during the second quarter. The company also indicated it maintains a robust pipeline for future merger and acquisition opportunities. With a 23-year track record of consistent dividend payments and strong financial health metrics, Republic Services demonstrates sustainable growth potential. Discover more insights about RSG and 1,400+ other stocks through comprehensive Pro Research Reports available on InvestingPro.
In other recent news, Republic Services reported significant developments that may interest investors. S&P Global Ratings upgraded Republic Services and its subsidiary, Allied Waste Industries, to ’A-’ from ’BBB+’ due to improved credit metrics. This upgrade also extended to the company’s unsecured debt, reflecting a stable outlook. Additionally, Republic Services’ shareholders have approved the Board of Directors and executive compensation during the 2025 Annual Meeting, with minimal opposition. Analyst firms have also adjusted their outlooks on the company. Scotiabank (TSX:BNS) raised its price target for Republic Services to $260 while maintaining a Sector Perform rating, noting a solid outlook despite recent labor disruptions. BMO Capital Markets increased its price target to $280 and reaffirmed an Outperform rating, citing the company’s focus on digital investments and the potential for future growth. JPMorgan has also raised its price target to $275 from $229, maintaining a Neutral rating and highlighting potential margin improvements from sustainability projects and strategic mergers. These updates reflect a positive sentiment towards Republic Services’ future prospects.
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