Wunderlich Securities Reiterates Buy, $21 Target on Covanta Holding

Wunderlich Securities remains Buy-rated with a $21 target price on Covanta Holding

as the company looks to report 4Q11 results. WUnderlich Securities notes, "Core fundamentals are solid, despite the headwind from lower electricity rates. FCF in 2011 could exceed $250mm, confirming the stability of CVA's cash flow. At 12.5% FCF yield, CVA makes a compelling investment in our view. CVA announced a contract renewal with the City of Alexandria, VA that includes options to extend disposal through 2038. In our view the initial headwind is $1.5-$3.1mm. Over time this should be offset by a 2.75% annual price escalator and increased metals and special waste volumes. We are looking for added transparency in the 10-K and/or progress on growth opportunities to provide upside for the stock." CVA closed at $14.62 a share on Monday.