UPDATE: Wunderlich Securities Maintains Casella Waste Systems at Buy on Free Cash Flow Outlook
Wunderlich Securities reiterated its Buy rating and $8.50 price target on Casella Waste Systems (NASDAQ: CWST) as free cash flows should help to offset volume and pricing headwinds.
Wunderlich Securities commented, "Marginally positive pricing in 2Q13 will not be enough to offset volume declines and depressed commodity prices. Lower interest expense post CWST's balance sheet refinancing should offset the weaker revenues and help deliver EPS of negative $0.01 versus a negative $0.03 in 2Q12. Looking towards the future, CWST interest savings combined with SG&A reductions, Maine Energy (MERC) savings, the expansion of Southbridge landfill volumes, and the eventual expiration of the Ogden (Covanta) put-or-pay contract puts the run-rate free cash flow in the $24mm-$26mm range. That said, can and will CWST act to move faster in creating shareholder value?"
Casella Waste Systems closed at $4.42 on Friday.
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Tags: Wunderlich Securities