‘Attractive Entry Point’: Goldman Sachs Steps into the Environmental Services Arena With 2 New Buy Calls

We rarely stop to think how fundamental waste collection, recycling, and disposal are to the functioning of modern life. Yet, these services underpin the cleanliness, health, and livability of every city and town. In today’s industry language, they fall under “environmental services” – a long-standing sector that continues to evolve.

As with many essential services, the financial opportunity is significant, a point highlighted by Goldman Sachs analyst Adam Bubes: “Over the past 15 years, Environmental Services stocks have evolved from low-growth defensives into high-quality compounders, supported by a sustained price-cost spread that has delivered a ~13% EPS CAGR over the last 10 years compared to a ~5% CAGR over the previous 10 years. The transformation has been driven by accelerating national and local consolidation, constrained local landfill markets, rising operating costs, and greater competitive discipline. Our analysis of industry structure and pricing indicators points to a durable price-cost trajectory, providing a baseline of high-single-digit % through-cycle EPS growth.”

Against this backdrop, Bubes has rolled out two new Buy-rated environmental-services stocks that he believes offer compelling entry points. Let’s take a closer look at what’s driving Goldman’s renewed interest – and see how the broader analyst community sizes up these fresh picks, according to the TipRanks database.

Waste Management (WM)

We’ll start with the industry’s leader, Waste Management, Inc. In the business since 1968, this company is the largest environmental services firm in the US, with the highest market cap, at $87.5 billion. The company provides a full range of services in the waste and environmental management fields, including collection and disposal, resource recovery, and renewable energy. Through its business line – Collection, Landfill, Transfer, Recycling, and Other – Waste Management partners with more than 20 million customers.

According to the company’s data sheet, the North American waste and recycling industry generates approximately $75 billion in total annual revenue – and Waste Management captures the largest share of that market. Approximately 80% of the company’s business comes from private industry contracts, with the remaining 20% originating in the public sector.

Collection services make up the lion’s share of Waste Management’s revenue mix, at 55% of the total. Transfer services – that is, hauling waste – provide another 21%. Landfill and recycling services account for 10% and 5%, respectively. Of the large collection segment, 41% comes from commercial clients, 29% from the industrial field, and 21% from residential pickups. Waste Management owns a large network of landfills, and about 70% of the waste it collects is sent to these owned assets, an important point that allows the company to realize improvements in its margins and cash flows.

The last quarterly financial report from Waste Management covered 3Q25, and the company’s results missed expectations. Revenue came in at $6.44 billion for the period – up more than 14% year-over-year but missing the forecast by $60 million. The company’s bottom line, the $1.98 non-GAAP EPS, was up 2 cents per share year-over-year, but it also missed the forecast, coming up short by 3 cents per share. Waste Management reported a free cash flow of $2.11 billion for the first nine months of 2025, a figure that was up 13.5%.

Investors were spooked by the top- and bottom-line misses. The stock tumbled by almost 8% in the 48 hours after the earnings release – but it has since regained its footing.

For Goldman Sachs’ Adam Bubes, WM’s strong foundation is the key. Summing up his upbeat take, the analyst writes, “We are constructive on WM’s organic growth outlook and track record. We forecast a 7.7% EBITDA CAGR for WM over 2025E–2027E driven by: (i) a continued strong price/cost spread, (ii) ramping high-ROI recycling and landfill gas investments, and (iii) continued synergy capture related to WM’s Stericycle acquisition. We leave room for potential upside on positive volume growth in Healthcare Solutions (Stericycle) and improving recycled commodity pricing. WM’s strong price/cost track record and outlook is underpinned by its industry-leading local competitive positioning.”

These comments underpin Bubes’ Buy rating, while his $256 price target indicates room for an 18% upside potential over the next year. (To watch Bubes’ track record, click here)

There are 22 analyst reviews on file for Waste Management, and the breakdown of 15 Buys to 7 Holds gives a Moderate Buy consensus rating. The shares have a current trading price of $217.35, and their $246.70 average target price implies an upside of 13.5% on the one-year horizon. (See WM stock forecast)

Republic Services (RSG)

The next stock we’re looking at, Republic Services, is the second largest waste management company operating in the US markets, when measured by either market cap or annual revenue. The company is valued at $67 billion, and for the four quarters ending with 3Q25, the company pulled in $16.5 billion at its top line.

Republic offers its customers a full range of environmental solutions, from advanced recycling tech and services to waste disposal and equipment rentals. In addition, the company handles such specialized operations as treatment and disposal of special or hazardous waste products, and emergency responses around the clock. The company boasts a customer base of over 13 million strong across North America.

To support these operations, Republic maintains a network of 1,000-plus locations and facilities across North America, and operates a fleet of 17,000 trucks and other heavy vehicles. This network carries out all of Republic’s activities, primarily its main business of solid waste transport, disposal, and recycling.

In its last reported quarter, 3Q25, Republic saw top-line revenue of $4.2 billion, a total that was up 3.4% year-over-year but missed the forecast by $38.5 million. The company’s non-GAAP EPS, at $1.90, was up 9 cents per share from the prior-year period and was 12 cents per share higher than had been expected. For the year-to-date, Republic has generated a cash flow from operations of $3.32 billion, with an adjusted free cash flow stated as $2.19 billion.

For Goldman analyst Bubes, the key point here is the company’s continued potential for long-term gains. He writes of Republic, “We believe RSG has evolved into an industry leader in portfolio quality and operational execution… We think the valuation re-rating is well justified and see room for relative valuation expansion from current levels. Today, RSG stands out for its strong earnings execution, longest landfill reserve life vs peers, 90% vertical integration across its markets, attractive local level landfill markets, and lesser exposure to commodity prices… We forecast an EBITDA CAGR of ~5.5% for RSG over 2025E–2027E driven by (i) continued strong price/cost spread supported by vertical integration and strong local market share, (ii) margin runway in Environmental Solutions, and (iii) ramping sustainability investments.”

Bubes quantifies his stance with a Buy rating and a one-year price target of $255, implying the stock will gain 17% over the coming year.

This waste disposal firm has picked up 19 recent analyst reviews, and the 11-to-8 split, favoring Buy over Hold, supports a Moderate Buy consensus rating. The stock is priced at $217.37 with a $245.76 average price target that suggests a 12-month gain of 13%. (See RSG stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.