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With a market cap of $66.5 billion, Republic Services, Inc. (RSG) is a leading provider of non-hazardous waste and recycling services, offering innovative solutions like landfill gas-to-energy and renewable energy projects. With operations spanning the U.S. and Canada, the company serves residential, commercial, and industrial customers through its extensive network of landfills, recycling centers, and transfer stations. The Phoenix, Arizona-based company is set to unveil its fiscal Q4 earnings results after the market closes on Thursday, Feb. 13.
Ahead of this event, analysts expect the waste management company to report a profit of $1.37 per share, down 2.8% from $1.41 per share in the year-ago quarter. However, the company has surpassed Wall Street's bottom-line estimates in the past four quarters. RSG exceeded the consensus EPS estimate by an 11.7% margin in the most recent quarter.
For fiscal 2024, analysts expect RSG to report EPS of $6.25, up 11.4% from $5.61 in fiscal 2023.
RSG has slightly underperformed the broader markets over the past 52 weeks, with shares up 25%, compared to the S&P 500 Index's ($SPX) 25.8% gain and the Industrial Select Sector SPDR Fund's (XLI) 25.1% return over the same period.
Despite better-than-expected Q3 adjusted EPS of $1.81 on Oct. 29, RSG shares fell 2.7% the next day as the company's total revenue of $4.1 billion missed analyst expectations, and it guided full-year revenue toward the low end of its forecast. Weaker demand in parts of the business contributed to a decline in volume-related revenue, raising concerns. Finally, the significant drop in cash and cash equivalents from $490.6 million in Q2 to $83.4 million in Q3, alongside heavy acquisition and capital spending, likely fueled investor caution about the company's liquidity and cash flow management.
Analysts' consensus rating on RSG stock is cautiously optimistic, with a "Moderate Buy" rating overall. Out of 21 analysts covering the stock, opinions include 11 "Strong Buys,” two "Moderate Buys," and eight "Holds.” This configuration is more bullish than three months ago, with nine analysts suggesting a "Strong Buy."
As of writing, RSG is trading below the average analyst price target of $226.74.
