Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Scotiabank (TSX:BNS) has reduced its price target on Waste Connections Inc . (NYSE:WCN) to $202.00 from $206.00 while maintaining a Sector Perform rating on the waste management company’s stock. According to InvestingPro data, the company currently trades at high valuation multiples across multiple metrics, with analyst targets ranging from $150 to $227.
The price target adjustment comes as Waste Connections’ performance currently tracks near the mid-point of its guidance ranges, according to Scotiabank’s analysis released Friday.
The financial institution noted that potential upside to guidance would likely stem from new acquisitions, as current guidance already incorporates $125 million of annualized revenues from acquisitions reported by the first quarter, but probably excludes an expected $50-$100 million in additional revenues from future merger and acquisition activity.
Scotiabank indicated it would monitor developments related to the Chiquita landfill in California, though it does not anticipate any incremental capital expenditure requirements at this time.
The bank also highlighted that Waste Connections’ target of achieving a $200 million EBITDA run-rate by 2026 from 12 renewable natural gas (RNG) projects—representing approximately 5.4% of Scotiabank’s 2027 EBITDA estimate—was based on RIN (Renewable Identification Number) prices of $2.50-$2.60.
In other recent news, Waste Connections has announced a $500 million public offering of senior notes, priced at 5.25% and due in 2035. The company expects to net approximately $495 million from this offering, which will be used to repay part of its outstanding borrowings under its revolving credit facility. Additionally, Truist Securities has reiterated its Buy rating on Waste Connections with a price target of $220, noting the company’s strong balance sheet and free cash flow as key advantages in its ongoing acquisition strategy. In a separate update, JPMorgan raised its price target for Waste Connections to $230, citing the company’s strategic market positioning and robust pricing strategies. Oppenheimer maintained its Outperform rating and a $216 price target, following first-quarter financial results that exceeded expectations in both revenue and earnings. Analysts highlighted Waste Connections’ ability to retain pricing and manage employee turnover effectively, which could lead to potential upside in future margins. The company remains optimistic about its merger and acquisition activities, expecting to surpass its average level of M&A activity for the year. These developments underscore Waste Connections’ strategic growth initiatives and financial resilience.
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