Wells Fargo analyst Jerry Revich initiated coverage of Waste Connections (WCN) with an Overweight rating and $186 price target Environmental Services group is down 15% since April due to headwinds in the 15% of the business without pricing power as recycled cardboard prices are down 30% and specialty waste volumes have slowed, the analyst tells investors in a research note. The firm adds however that cardboard prices are near trough, estimates have been reset at 6% EPS growth, and the group is set to benefit from a free cash flow inflection as vertical integration investments transition to cash flow.
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