Republic Services (RSG – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst James Schumm from TD Cowen maintained a Hold rating on the stock and has a $255.00 price target.
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James Schumm has given his Hold rating due to a combination of factors that reflect both the strengths and limitations in Republic Services’ current market position. The company has been performing well, with a straightforward business model that investors find appealing. However, the stock has significantly outpaced its peers year-to-date, and its valuation is at a two-decade high, which suggests limited upside potential in the near term.
Despite the company’s strong performance in terms of adjusted EBITDA and free cash flow, which exceeded expectations, the overall revenue fell slightly short. The improvement in margins was largely driven by pricing strategies that surpassed cost inflation, yet the market’s response to these factors has already been reflected in the stock’s current price. Consequently, while the business fundamentals remain solid, the potential for further stock appreciation appears limited, justifying the Hold rating.
In another report released on April 25, Morgan Stanley also maintained a Hold rating on the stock with a $245.00 price target.