Investment analysts at The Goldman Sachs Group have upgraded Waste Connections (NYSE: WCN) to a “strong-buy” rating, according to a research note released to investors on Monday. This significant endorsement reflects growing confidence in the company’s financial performance and market potential.
The upgrade comes amid a flurry of recent analyses from various equity research firms. On November 12, Sanford C. Bernstein initiated coverage of Waste Connections, assigning an “outperform” rating with a target price of $200.00. In contrast, National Bankshares adjusted their target price downward from $211.00 to $196.00 while maintaining an “outperform” rating in a report dated October 7.
In an interesting juxtaposition, Barclays reiterated a “negative” outlook for the stock on October 23. On the same day, Citigroup reduced its price target from $199.00 to $196.00, assigning a “neutral” rating. Meanwhile, Wells Fargo & Company initiated coverage on November 13 with an “overweight” rating and a target price of $186.00.
As of now, the consensus among analysts shows a favorable outlook for Waste Connections. Six analysts have rated the stock as a strong buy, while fifteen have assigned a buy rating. Three analysts have recommended holding the stock, and one has suggested selling. According to MarketBeat, Waste Connections holds an average rating of “buy” with a consensus target price of $208.32.
Financial Performance Insights
Waste Connections recently reported its earnings for the third quarter of 2023 on October 21. The company posted earnings per share (EPS) of $1.44, surpassing the consensus estimate of $1.38 by $0.06. Revenue for the quarter reached $2.47 billion, slightly above the anticipated $2.46 billion. With a net margin of 6.65% and a return on equity of 16.07%, the company demonstrated solid growth, with revenue increasing by 5.1% year-over-year. This growth is notable, particularly as the firm reported an EPS of $1.35 during the same quarter last year.
Looking ahead, Waste Connections has projected its fiscal year 2025 guidance, with sell-side analysts estimating an EPS of $5.28 for the current fiscal year.
Insider Activity and Institutional Investments
In related news, Edward E. Guillet, a director at Waste Connections, sold 9,000 shares of the company’s stock on October 28 for an average price of $174.44, resulting in a total transaction value of approximately $1,569,960.00. Following this sale, Guillet holds 14,883 shares, valued at around $2,596,190.52, indicating a 37.68% decrease in his holdings. This transaction was disclosed in a filing with the Securities and Exchange Commission (SEC).
Institutional investors have also been active in adjusting their positions in Waste Connections. Notably, KERR Financial Planning Corp purchased a new stake in the company worth approximately $30,000 in the third quarter. Additionally, Kimelman & Baird LLC increased its stake by 0.9% to own 189,255 shares, valued at $33,271,000.
Prana Capital Management LP made a significant move, growing its stake by 746.1% to hold 73,512 shares, valued at $12,923,000. Other investors, including CIBC Bancorp USA Inc. and Achmea Investment Management B.V., have also made adjustments to their holdings, reflecting continued institutional confidence in Waste Connections, which now has 86.09% of its stock held by institutional investors.
Waste Connections, based in the United States and Canada, specializes in non-hazardous waste collection, transfer, disposal, and resource recovery services. The company serves a diverse clientele, including residential, commercial, municipal, and industrial customers, as well as those involved in exploration and production.
This robust upgrade from Goldman Sachs and the recent financial results suggest a strong outlook for Waste Connections, positioning it favorably in the competitive market landscape.
