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With a market cap of $65 billion, Republic Services, Inc. (RSG), based in Phoenix, Arizona, is the second-largest provider of non-hazardous solid waste collection, disposal, recycling, and energy services in the U.S. The company is involved in landfill gas-to-energy and renewable energy projects.
Shares of Republic Services have notably outperformed the broader market over the past year. RSG has surged 41.6% over this time frame, while the broader S&P 500 Index ($SPX) is up 27.5%. In 2024, the stock is up 25.4%, compared to SPX’s 17.8% return on a YTD basis.
Narrowing the focus, RSG has surpassed the VanEck Environmental Services ETF’s (EVX) 15.8% returns over the past year and 17.4% on a YTD basis.
On Jul. 24, Republic Services announced its Q2 earnings report, and its stock plunged 5.2% in the following trading session. It reported a profit of $511.5 million, or $1.62 per share, with adjusted earnings of $1.61 per share. These results exceeded Wall Street's expectations of $1.53 per share. The company also posted revenue of $4.05 billion, surpassing the forecasted $4.03 billion.
For the current fiscal year, ending in December, analysts expect Republic Services’ EPS to rise 10.2% year over year to $6.18. Moreover, the company’s earnings surprise history is solid. It exceeded the consensus estimate in each of the last four quarters.
Republic Services stock has a consensus “Moderate Buy” rating overall. Out of 19 analysts covering the stock, eight rate it as a "Strong Buy," one suggests a “Moderate Buy,” and 10 advise a “Hold.”
This configuration is more bullish than two months ago, with seven analysts assigning the stock a “Strong Buy.”
On Aug. 5, TD Cowen raised Republic Services' price target to $200 from $195 while maintaining a “Hold” rating. The firm noted RSG’s strong Q2 results despite industry-wide softness in construction and residential waste volumes.
The mean price target of $213.61 implies a premium of 3.3% to its current price level. The Street-high price target of $230 suggests an upside potential of 11.2%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
