TD Cowen has increased its price target for Waste Connections (WCN, Financial) from $205 to $210, while reaffirming a Buy rating on the stock. The decision follows the company's robust performance in the first quarter, where it effectively delivered solid financial results.
Moreover, Waste Connections has upheld its guidance for 2025, indicating confidence in its long-term strategy. The company remains unfazed by potential tariff impacts, as these are expected to minimally affect its operations. Additionally, Waste Connections has not encountered any significant weakening in the economically sensitive sectors of its business, further supporting the optimistic outlook.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Waste Connections Inc (WCN, Financial) is $212.54 with a high estimate of $227.00 and a low estimate of $197.00. The average target implies an upside of 8.04% from the current price of $196.72. More detailed estimate data can be found on the Waste Connections Inc (WCN) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Waste Connections Inc's (WCN, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Waste Connections Inc (WCN, Financial) in one year is $195.30, suggesting a downside of 0.72% from the current price of $196.72. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Waste Connections Inc (WCN) Summary page.
WCN Key Business Developments
Release Date: February 13, 2025
- Q4 2024 Revenue: $2.26 billion, up 11% year-over-year.
- Full Year 2024 Revenue: $8.92 billion, up 11.2% year-over-year.
- Q4 2024 Adjusted EBITDA: $732 million, 32.4% of revenue.
- Full Year 2024 Adjusted EBITDA: $2.902 billion, up 15% year-over-year, with a margin of 32.5%.
- Adjusted Free Cash Flow 2024: $1.218 billion, exceeding expectations.
- Acquisition Revenue Contribution 2024: $529 million for the full year.
- Core Pricing Q4 2024: 6.7%.
- Solid Waste Core Pricing 2024: 7.1%.
- Chiquita Canyon Landfill Closure Costs: $116.1 million write-down and $480.8 million in closure and post-closure liabilities.
- 2025 Revenue Outlook: $9.45 billion to $9.6 billion.
- 2025 Adjusted EBITDA Outlook: $3.12 billion to $3.2 billion, with a margin of 33% to 33.3%.
- 2025 Adjusted Free Cash Flow Outlook: $1.3 billion to $1.35 billion.
- Q1 2025 Revenue Outlook: $2.2 billion to $2.225 billion.
- Q1 2025 Adjusted EBITDA Outlook: $700 million to $710 million, 31.8% to 31.9% of revenue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Waste Connections Inc (WCN, Financial) achieved double-digit growth in both revenue and adjusted EBITDA for Q4 2024.
- The company successfully integrated acquisitions totaling approximately $750 million in annualized revenue in 2024.
- Employee turnover reached multiyear lows, improving operational execution and contributing to margin expansion.
- Price-led organic solid waste growth and improving commodities are expected to position the company at the high end of its financial outlook for 2025.
- The company has a robust acquisition pipeline, with over $75 million in annualized revenue already closed or signed for 2025.
Negative Points
- The closure of the Chiquita Canyon landfill resulted in significant financial impacts, including a $116.1 million write-down and $480.8 million in closure liabilities.
- Solid waste volumes in Q4 2024 were down 2.7%, reflecting a focus on quality of revenue and shedding unprofitable contracts.
- The company faces headwinds from declining commodity values, RINs, and FX rates, impacting margins.
- Incremental costs associated with the Chiquita Canyon ETLF event exceeded expectations, with significant outlays projected for 2025.
- Despite strong acquisition activity, the company anticipates continued volume declines due to strategic shedding and economic conditions.
