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Phoenix-based Republic Services, Inc. (RSG) stands as a leader in environmental services across the U.S. and Canada. With a $68.3 billion market cap, the company excels in waste collection, recycling, and energy solutions, serving residential, commercial, and industrial customers.
Its innovative approach includes landfill services, organics processing, and the sale of recycled materials like aluminum and glass. Founded in 1996, Republic Services has transformed waste management into a cornerstone of sustainability and community impact.
Shares of Republic Services have jumped 37.5% over the past 52 weeks and 33.4% on a YTD basis, surging past the S&P 500 Index’s ($SPX) 32.8% returns over the past year and 26.6% gains in 2024.
Narrowing the focus, RSG has also outperformed the VanEck Environmental Services ETF’s (EVX) 32.6% returns over the past 52 weeks and 25.3% gains on a YTD basis.
Republic Services’ shares have outpaced the broader market in 2024, propelled by surging demand for waste management amid escalating urbanization and tightening sustainability regulations. The company’s strategic investments in cutting-edge recycling technologies and renewable energy infrastructure have solidified its growth trajectory.
Earnings consistently surpassing expectations, driven by stringent cost controls and price hikes, have further cemented investor confidence. Adding to the allure, RSG’s impressive 20-year streak of dividend growth has cemented its reputation for shareholder reliability.
In a landscape fraught with economic uncertainty, Republic Services' resilient, defensive business model has become a magnet for cautious capital. Favorable regulatory shifts and calculated expansion into underserved markets have added momentum, establishing RSG as a beacon of stability and growth in a turbulent year.
For the current fiscal year, ending in December, analysts estimate Republic Services’ profit to surge 11.2% year over year to $6.24 per share. Moreover, the company's earnings surprise history is impressive. It beat the consensus estimates in each of the past four quarters.
The overall consensus is a “Moderate Buy” among the 21 analysts covering RSG stock. That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” and 11 “Holds.”
The overall configuration is slightly less bullish than two months back when the stock had eight “Strong Buys.”
Jefferies (JEF) remains bullish on RSG stock, raising its price target last month to $235 from $229 after a strong Q3 performance and reiterating a “Buy” rating on the waste management giant. The company delivered a 2% EBITDA beat and margins exceeding estimates by 120 basis points.
While Q4 EBITDA may dip slightly, Republic’s steady 2024 guidance and strategic focus on sustainability and technology investments keep confidence high. Improvements in its Environmental Solutions business and disciplined pricing further bolster optimism.
The mean price target of $221.84 suggests an upside potential of 1.1% from the current price levels. However, the Street-high target price of $244, set by Truist Securities last month, implies the stock could rally as much as 11.2%.
