Strategic Acquisition by Clean Harbors Poised to Enhance Revenue and Earnings: A Buy Rating Justified

In a report released today, James Ricchiuti from Needham maintained a Buy rating on Clean Harbors (CLH – Research Report), with a price target of $235.00.

James Ricchiuti has given his Buy rating due to a combination of factors, particularly the strategic acquisition of HEPACO by Clean Harbors (CLH). This acquisition is poised to bolster CLH’s Environmental Services revenue by approximately 6% and substantially enhance its Field and Emergency Services business. The integration of HEPACO, which mirrors the successful HPC acquisition from three years prior, is likely to yield significant benefits due to its strong presence on the east coast and its national emergency response call center capabilities, which complement CLH’s existing operations on the west coast.

Additionally, Ricchiuti anticipates that HEPACO will contribute $30 million in adjusted EBITDA for the year 2024, with CLH aiming to achieve $20 million in cost synergies after the first full year post-acquisition. This financial uplift, coupled with the ongoing robust tailwinds in CLH’s current business, presents potential for earnings to surpass the current Street estimates in the upcoming year. These factors collectively justify Ricchiuti’s optimistic outlook and his Buy recommendation for Clean Harbors’ stock.

In another report released on March 27, BMO Capital also maintained a Buy rating on the stock with a $225.00 price target.

Based on the recent corporate insider activity of 83 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CLH in relation to earlier this year.

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Clean Harbors (CLH) Company Description:

Clean Harbors, Inc. engages in the provision of environmental, energy, and industrial services. It operates through the Environmental Services and Safety-Kleen business segments. The Environmental Services segment consists of the technical services; industrial services; field services; and oil, gas, and lodging businesses. The Safety-Kleen segment includes parts washer services, containerized waste services, vac services, used motor oil collection, and sale of base and blended oil products as well as complementary products. The company was founded by Alan S. McKim in 1980 and is headquartered in Norwell, MA.