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On Friday, UBS analyst Jon Windham adjusted the price target for Clean Harbors (NYSE:CLH) to $240 from the previous $250, while maintaining a Neutral rating on the stock. The revision follows the company’s fourth-quarter financial results and its forecast for the coming fiscal year. According to InvestingPro data, the stock has experienced notable pressure, declining 7.7% in the past week, with current trading at $215.61.
Clean Harbors reported fourth-quarter adjusted EBITDA that was 2% higher than the consensus expectations. Additionally, the company provided guidance for adjusted EBITDA and free cash flow (FCF) for the fiscal year 2025. In response to this guidance, UBS has updated its adjusted EBITDA forecasts for 2025 to 2027 to $1,206 million, $1,374 million, and $1,595 million, respectively. These figures are a decrease from the previous estimates of $1,226 million, $1,453 million, and $1,718 million. The company maintains strong financial health with a current ratio of 2.21x and operates with moderate debt levels. For deeper insights into Clean Harbors’ financial metrics and 13 additional ProTips, consider accessing the comprehensive research available on InvestingPro.
The adjustments made by UBS are primarily due to more conservative growth projections for Clean Harbors’ Environmental Services (ES) segment. There were also minor downward revisions for the Safety-Kleen Sustainability Solutions (SKSS) segment. Despite these changes, UBS reaffirmed its Neutral stance on the company’s shares.
Windham’s report highlighted that the stock is currently trading around 1x above the target 2026 estimated enterprise value to adjusted EBITDA (EV/adj. EBITDA) multiple of 11x. This valuation metric is used by analysts to compare the value of a company, including debt, to its earnings before interest, taxes, depreciation, and amortization, adjusted for certain factors.
The revised price target and maintained rating reflect UBS’s current view of Clean Harbors’ stock value and expected performance based on the latest financial data and market conditions.
In other recent news, Clean Harbors reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.56, compared to the forecast of $1.36. However, the company’s revenue slightly missed projections, coming in at $1.43 billion against the anticipated $1.44 billion. Despite these mixed results, Clean Harbors achieved strong full-year performance with an 11% revenue growth and a 10% rise in consolidated EBITDA. In response to recent guidance, Stifel, TD Cowen, and Oppenheimer have all adjusted their price targets for Clean Harbors while maintaining positive ratings, with Stifel setting a target of $285, TD Cowen at $300, and Oppenheimer at $254. These revisions reflect cautious optimism due to anticipated challenges in the company’s Environmental Services segment and the Safety-Kleen Sustainability Solutions division. Analysts from these firms pointed to potential growth opportunities, such as new emergency response projects and increased PFAS-related sales, which are not fully reflected in the company’s conservative fiscal year 2025 guidance. Clean Harbors’ financial guidance for 2025 includes projected EBITDA growth between 5% and 8% in its Environmental Services segment, indicating a positive outlook despite the cautious start to the year.
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