These are top 10 stocks traded on the Robinhood UK platform in July
On Thursday, William Blair initiated coverage on Waste Connections Inc . (NYSE:WCN) with an Outperform rating, signaling confidence in the company’s growth potential. The company, currently valued at $50.74 billion, is trading near its 52-week high of $197.74. Analysts at William Blair highlighted the company’s valuation, trading at 19 times EBITDA and 38 times P/FCF, or 32 times excluding certain capital expenditures, based on their 2025 estimates. According to InvestingPro data, the stock currently trades at an EV/EBITDA multiple of 24.7x, suggesting a premium valuation relative to peers. They see this slight premium over its solid waste peers as warranted due to Waste Connections’ leading margins and cash conversion capabilities, along with a significant opportunity for mergers and acquisitions in the core solid waste sector.
The firm’s analysts underscored the attractiveness of Waste Connections’ steady and defensive growth prospects. With revenue growth of 11.19% in the last twelve months and a five-year revenue CAGR of 11%, the company has demonstrated consistent expansion. They also suggested that there is potential for the company’s estimates to increase as it capitalizes on both organic and inorganic growth opportunities. InvestingPro analysis reveals 15+ additional insights about the company’s growth trajectory and financial health. These opportunities are supported by structural tailwinds outlined in William Blair’s October white paper, which discussed the evolving dynamics in the solid waste industry and the potential for increased monetization.
William Blair’s positive outlook on Waste Connections is based on the company’s ability to execute on its growth strategies in the face of industry-wide structural drivers. The company maintains a GOOD financial health score according to InvestingPro, with moderate debt levels and strong cash flow generation. However, the analysts also cautioned about risks that could impact the company’s performance. Get access to the comprehensive Pro Research Report for a detailed analysis of Waste Connections’ risk factors and growth drivers, along with 1,400+ other top stocks. These risks include the volatility of commodity and Renewable Identification Number (RIN) prices, potential labor shortages, and the challenges associated with executing mergers and acquisitions.
Waste Connections’ stock is expected to benefit from the company’s peer-leading margins and the possibility of increased estimates as it pursues its growth strategies. William Blair’s initiation of coverage with an Outperform rating reflects their belief in the company’s capacity to navigate the solid waste industry’s challenges and capitalize on the opportunities presented by structural changes.
In other recent news, Waste Connections Inc. announced its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $1.16, which missed the forecasted $1.21. The company’s revenue for the quarter was $2.04 billion, falling short of the expected $2.25 billion. However, Waste Connections reported a year-over-year revenue increase of 11% to $2.26 billion in the same quarter. The full-year revenue reached $8.92 billion, marking an 11.2% increase compared to the previous year. Jefferies analysts responded to these results by raising their price target for Waste Connections to $215 and maintaining a Buy rating, noting that revenue exceeded estimates but EBITDA did not meet expectations. The company’s 2025 guidance suggests continued strong performance, with anticipated revenue between $9.45 billion and $9.6 billion and an adjusted EBITDA range of $3.12 billion to $3.2 billion. Waste Connections is focusing on innovation, with projects in PFAS treatment and renewable natural gas facilities, while also achieving operational improvements such as reduced employee turnover and increased rail shipments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.