Waste Connections initiated with an Outperform at Wolfe Research

Wolfe Research analyst Timna Tanners initiated coverage of Waste Connections with an Outperform rating and $152 price target as part of a broader research note on Environmental Services. The sector has clear historical outperformance during downturn and offers attractive barriers to entry and pricing power, with smaller players able to grow via M&A, the analyst tells investors in a research note, adding that the firm sees resilient pricing power and incremental upside from recycling, automation, and cost cutting. The stock also deserves a premium for outsized EBITDA margins that can be sustained into any downturn and can also top outsized inflation given the “attractive evidence” of its sticky premium multiple over the years, Wolfe added.