UPDATE: Imperial Capital Initiates Coverage on Covanta Holding Corp. with In-Line Rating, $19 PT on Cash-Generative Model with Attractive Long-Term Prospects

In a report published Friday, Imperial Capital analyst Scott Levine initiated coverage on Covanta Holding Corp. CVA with an In-Line rating and $19.00 price target. In the report, Imperial Capital noted, “We are initiating coverage with an In-Line rating and a one-year price target of $19, 7% above the recent share price. Although CVA's cash-generative business model is attractive and its long-term prospects remain bright, the company faces a number of impediments that we expect to dampen earnings and cash flow in FY13-14. Accordingly, our EBITDA estimates are below consensus, and we await evidence of upside potential (growth initiatives, commodity prices, and capital deployment are possible drivers), or a further pullback in the shares, before becoming more positive.” Covanta Holding Corp. closed on Thursday at $17.71.