Maintaining Hold on Republic Services Amid Solid Performance and Valuation Concerns

Republic Services (RSG – Research Report), the Industrials sector company, was revisited by a Wall Street analyst on April 30. Analyst David Manthey from Robert W. Baird maintained a Hold rating on the stock and has a $203.00 price target.

David Manthey has given his Hold rating due to a combination of factors including the company’s solid quarterly performance and consistent execution of strategic pricing, yet tempered by a valuation that suggests limited near-term upside. Republic Services showed strong core pricing, margin expansion, and operating cost leverage in the latest quarter, reinforcing its position as a significant player in the US municipal solid waste industry. Despite positive business indicators such as yield improvements and EBITDA margin achievements, Manthey’s decision to maintain a Neutral stance on the stock is influenced by the company’s conservative full-year guidance and the potential for changes in recycled commodity prices and cyclical volumes.
Moreover, Manthey acknowledges Republic Services as a core long-term holding, underscoring the company’s disciplined pricing strategy and the resilience of its business model. Key operational positives like reduced driver turnover, progress in renewable energy initiatives, and a robust acquisition pipeline contribute to the company’s strong secular outlook. Nevertheless, the current elevated valuation and the proximity of the stock’s price to Baird’s target limit the anticipated upside, leading Manthey to advise holding the stock as opposed to buying or selling in the near term.

According to TipRanks, Manthey is a top 100 analyst with an average return of 17.9% and a 71.10% success rate. Manthey covers the Industrials sector, focusing on stocks such as Republic Services, Waste Management, and Clean Harbors.

In another report released yesterday, Scotiabank also maintained a Hold rating on the stock with a $213.00 price target.

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Republic Services (RSG) Company Description:

Arizona-based Republic Services, Inc. provides non-hazardous solid waste collection, transfer, disposal, recycling, and environmental services in the United States. The company serves small-container, large-container, and municipal and residential customers.