Stifel resumes coverage of Casella Waste stock with Buy rating

Investing.com - Stifel has resumed coverage of Casella Waste Systems (NASDAQ:CWST) with a Buy rating and a price target of $113.00, representing potential upside from the current price of $89.58. The stock is currently trading near its 52-week low of $85.21, while analyst targets range from $88 to $140, according to InvestingPro data.

The firm cited Casella’s position as the smallest public solid waste company, with a market capitalization of $5.7 billion, noting it has "a very long runway to execute its inorganic playbook" and is positioned for industry-leading free cash flow compounding over the next seven years. The company has demonstrated strong growth, with revenue increasing 20.3% over the last twelve months.

Stifel highlighted Casella’s ownership of landfills in capacity-constrained areas of the Northeast, which should provide additional pricing power over time.

The firm projects upper-single-digit revenue growth over its seven-year forecast period, with approximately 4% organic growth and the remainder from acquisitions, while expecting AEBITDA margins to expand from 22.8% in 2025 to 23.5% in 2027.

Stifel identified integration execution as the largest risk, noting it is "taking longer than expected to integrate the GFL assets, which is currently weighing on the margin expansion potential for the business." The company maintains a moderate debt level with a debt-to-equity ratio of 0.8, while its current ratio of 1.7 indicates sufficient liquidity to meet short-term obligations.

In other recent news, Casella Waste Systems reported its Q2 2025 earnings, which revealed a significant shortfall in earnings per share (EPS) compared to projections, despite surpassing revenue expectations. The company’s EPS was $0.08, well below the forecasted $0.33, marking a surprise of -75.76%. However, revenue exceeded predictions, reaching $465.3 million against a forecast of $454.35 million. Jefferies responded to these results by lowering Casella’s stock price target to $115.11 from $118.00, maintaining a Hold rating due to concerns over margin performance. In another development, Barclays initiated coverage on Casella with an Underweight rating and a price target of $88.00, expressing concerns about the company’s geographic expansion efforts beyond its core Northeast market. Additionally, Casella Waste Systems announced a leadership transition, with John W. Casella set to become Executive Chairman and current President Ned Coletta appointed as the next CEO, effective January 1, 2026.

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