Waste Connections (TSE:WCN)
TSX:WCN
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Waste Connections
(TSX:WCN)
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Rating:64Neutral
Price Target:
C$234.00
▲(3.61% Upside)
Action:DowngradedDate:02/18/26
The score is driven mainly by solid underlying profitability and operating cash generation, plus constructive 2026 guidance for margins and free cash flow. These strengths are tempered by a weak technical setup (price below major moving averages), premium valuation (high P/E with low yield), and financial trajectory concerns from the 2025 revenue/FCF decline and rising leverage.
Positive Factors
Pricing power & margin expansion
Sustained above-trend core pricing and guided price-led organic growth support durable margin expansion. With long-term municipal and commercial contracts and limited local competition, pricing strength should continue to drive operating leverage and protect margins across multi-year cycles.
Negative Factors
Rising leverage trend
A multi-year rise in leverage reduces financial flexibility and increases vulnerability to cyclical slowdowns or higher rates. Elevated debt levels can constrain investment optionality, raise interest costs, and pressure covenant room if free cash flow weakens in tougher conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Pricing power & margin expansion
Sustained above-trend core pricing and guided price-led organic growth support durable margin expansion. With long-term municipal and commercial contracts and limited local competition, pricing strength should continue to drive operating leverage and protect margins across multi-year cycles.
Read all positive factors
Waste Connections (WCN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$57.74B
Dividend Yield0.75%
Average Volume (3M)329.68K
Price to Earnings (P/E)41.9
Beta (1Y)0.36
Revenue Growth10.49%
EPS Growth-32.11%
CountryCA
Employees23,854
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)1.75
Shares Outstanding255,681,230
10 Day Avg. Volume262,967
30 Day Avg. Volume329,680
Financial Highlights & Ratios
PEG Ratio0.56
Price to Book (P/B)5.47
Price to Sales (P/S)4.76
P/FCF Ratio36.98
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$278.69Price Target Upside23.40% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)7.46
Revenue Forecast (FY)C$13.59B
Waste Connections Business Overview & Revenue Model
Company Description
Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration a...
How the Company Makes Money
Waste Connections generates revenue primarily through its waste collection and disposal services, which account for the majority of its earnings. The company charges customers fees for collecting and transporting waste, as well as tipping fees for...
Waste Connections Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
The call highlights strong underlying operating performance: robust pricing, margin expansion (Q4 margin +110 bps, full-year margin 33%), solid adjusted EBITDA and free cash flow generation, disciplined M&A, meaningful shareholder returns, and tangible operational wins (safety, lower turnover, driver academies). These positives are partially offset by material one-off and ongoing headwinds — notably the Chiquita Canyon closure costs (~$200M in 2025; $100–150M expected in 2026), multiyear lows in recycled commodity values (20–30 bps margin drag baked into 2026), slower C&D/roll-off volumes, and RNG ramp/timing risks and lower RINs. Overall, the company presents a constructive outlook with margin and free cash flow expansion guided for 2026 and clear paths to additional upside (commodity recovery, M&A, RNG ramp, AI-driven efficiencies); the strength of the highlights outweighs the manageable but meaningful lowlights.Positive Updates
Adjusted EBITDA Growth and Margin Expansion
Q4 adjusted EBITDA of $796,000,000, up 8.7% year-over-year and 33.5% of revenue (Q4 margin +110 bps YoY). Full-year 2025 adjusted EBITDA of $3,125,000,000, up 7.7% YoY, with an industry-leading full-year adjusted EBITDA margin of 33% (reported +50 bps YoY; normalized >33.6%). 2026 guidance calls for adjusted EBITDA of $3,300,000,000–$3,325,000,000 and margin of 33.3%–33.4% (up 30–40 bps YoY).
Negative Updates
Recycled Commodity Headwinds
Recycled commodity values at multiyear lows reduced reported margins in 2025. Commodities revenue is approximately $250,000,000; management baked in a 15% year-over-year decline for 2026, equating to an approximate 20–30 basis-point drag on adjusted EBITDA margin (heaviest impact expected in H1 2026).
Read all updates
Q4-2025 Updates
Positive
Negative
Adjusted EBITDA Growth and Margin Expansion
Q4 adjusted EBITDA of $796,000,000, up 8.7% year-over-year and 33.5% of revenue (Q4 margin +110 bps YoY). Full-year 2025 adjusted EBITDA of $3,125,000,000, up 7.7% YoY, with an industry-leading full-year adjusted EBITDA margin of 33% (reported +50 bps YoY; normalized >33.6%). 2026 guidance calls for adjusted EBITDA of $3,300,000,000–$3,325,000,000 and margin of 33.3%–33.4% (up 30–40 bps YoY).
Read all positive updates
Company Guidance
The company guided 2026 revenue of $9.90–9.95 billion and adjusted EBITDA of $3.30–3.325 billion (adjusted EBITDA margin 33.3%–33.4%, +30–40 bps year-over-year, with a 20–30 bp commodity drag), assuming no macro improvement; solid waste organic growth of 3.5%–4% driven by core pricing of 5%–5.5% (yield ~4%, implying volumes roughly flat to down ~0.5%), acquisition contribution of about $125 million, and E&P flattish; adjusted free cash flow is expected to rise double digits to $1.40–1.45 billion (2025 was $1.26 billion, ~50% EBITDA conversion), with 2026 CapEx of ~$1.25 billion (including ~$100 million for RNG/recycling) and $100–150 million of Chiquita closure-related outlays factored into free cash flow (normalizing for non-core items implies ~50% conversion or ~ $1.7 billion); other structural items include D&A ~13.1% of revenue (intangibles amortization ~$195 million, ~$0.57/sh net of tax), interest expense ~ $330 million, and an effective tax rate of ~24.5%, with leverage around 2.75x and acquisition/commodity upside serving as potential sources of outperformance.Waste Connections Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 9.47B | 8.92B | 8.02B | 7.21B | 6.15B |
| Gross Profit | 4.01B | 3.73B | 3.28B | 2.88B | 2.50B |
| EBITDA | 2.98B | 2.25B | 2.26B | 2.17B | 1.75B |
| Net Income | 1.08B | 617.57M | 762.80M | 835.66M | 618.05M |
Balance Sheet | |||||
| Total Assets | 21.13B | 19.82B | 17.92B | 17.13B | 14.70B |
| Cash, Cash Equivalents and Short-Term Investments | 45.97M | 62.37M | 78.40M | 78.64M | 147.44M |
| Total Debt | 9.13B | 8.39B | 7.02B | 7.10B | 5.21B |
| Total Liabilities | 12.88B | 11.96B | 10.22B | 10.02B | 7.71B |
| Stockholders Equity | 8.25B | 7.86B | 7.69B | 7.11B | 6.99B |
Cash Flow | |||||
| Free Cash Flow | 1.22B | 1.17B | 1.19B | 1.11B | 953.91M |
| Operating Cash Flow | 2.41B | 2.23B | 2.13B | 2.02B | 1.70B |
| Investing Cash Flow | -2.02B | -3.16B | -1.58B | -3.09B | -1.69B |
| Financing Cash Flow | -360.04M | 944.95M | -544.40M | 1.03B | -499.50M |
Waste Connections Technical Analysis
Negative
225.84
Price Trends
226.99
Negative
232.67
Negative
239.62
Negative
Market Momentum
-0.21
Negative
49.40
Neutral
73.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WCN, the sentiment is Negative. The current price of 225.84 is above the 20-day moving average (MA) of 224.97, below the 50-day MA of 226.99, and below the 200-day MA of 239.62, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 49.40 is Neutral, neither overbought nor oversold. The STOCH value of 73.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WCN.
Waste Connections Risk Analysis
Waste Connections disclosed 38 risk factors in its most recent earnings report. Waste Connections reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Our inability to adapt to and manage the benefits and risks of Artificial Intelligence (AI) could expose us to liability or put us at a disadvantage. Q4, 2025
Waste Connections Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | C$21.96B | 5.68 | -21.15% | 0.14% | -10.87% | -168.62% | |
64 Neutral | C$57.74B | 41.90 | 13.22% | 0.75% | 10.49% | -32.11% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | C$4.71B | 31.34 | 14.65% | 2.27% | -1.47% | -79.68% | |
58 Neutral | C$478.83M | 55.53 | 36.36% | ― | 28.43% | 80.34% | |
44 Neutral | C$49.41M | -243.45 | -12.79% | ― | 63.49% | -133.70% |
* Industrials Sector Average
TSE:WCN
Waste Connections
225.84
-44.36
-16.42%
TSE:BLM
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0.90
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-17.43%
TSE:BQE
BQE Water
62.80
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25.60%
TSE:SES
SECURE Waste Infrastructure
21.74
8.54
64.66%
TSE:GFL
GFL Environmental
61.36
-5.76
-8.58%
TSE:ANRG
Anaergia
2.79
1.79
179.00%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.