Waste Connections (WCN) posted its second quarter financial results on August 4 after market close. The North American integrated waste services company reported strong results driven by higher solid waste pricing and volumes.
Revenue came in at $1.534 billion in the quarter ended June 30, an increase of 17.5% from $1.306 billion in the prior-year quarter.
Meanwhile, Q2 2021 net income was $177 million (C$0.68 per share), compared with a net loss of $227.1 million (-C$0.86 per share) in Q2 2020.
On an adjusted basis, Waste Connections earned C$0.81 per share in the second quarter, up 35% from C$0.60 per share a year ago. Adjusted EBITDA was $484.9 million in Q2 2021 compared with $394.3 million in Q2 2020.
The company raised its outlook for the full year on broad-based strength. (See Waste Connections stock charts on TipRanks)
“Given the strength of our results in the first half of the year and expected continuing momentum and margin expansion from these trends, we believe we are on track to report approximately $5.975 billion of revenue and $1.875 billion of adjusted EBITDA in 2021, exceeding our initial outlook provided in February,” said president and CEO Worthing F. Jackman. “More importantly, full year adjusted free cash flow is also pacing ahead of initial expectations and is now estimated at approximately $1 billion, or 53% of adjusted EBITDA.”
Jackman added that 2021 has the potential to be another year of outsized acquisition activity. Since the start of the year, Waste Connections has signed or closed 14 acquisitions with total annualized revenue of approximately $115 million.
On July 26, Raymond James analyst Patrick Tyler Brown maintained a Buy rating on WCN while raising its price target to $143.00 (C$179.35). This implies 12.4% upside potential.
Overall, the consensus on the Street is that WCN is a Strong Buy based on 7 Buys. The average Waste Connections price target of C$169.32 implies 6% upside potential to current levels.
TipRanks’ Smart Score
WCN scores a 9 out of 10 on the TipRanks Smart Score rating system, indicating that the stock returns are likely to beat the overall market.
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