UPDATE: Wunderlich Securities Downgrades Casella Waste Systems to Hold, Lowers PT on Limited Options

In a report published Monday, Wunderlich Securities analyst Michael E. Hoffman downgraded the rating on

from Buy to Hold, and lowered the price target from $7.00 to $6.00. In the report, Wunderlich Securities noted, “We are reducing our rating to Hold and price target to $6.00 on shares of Casella Waste (CWST). CWST has made material progress stabilizing the business model, returning to a discipline of real pricing, even making up some of the displaced volume specifically in its Western Region. We suspect as 4Q reports there will be incremental evidence of this progress, yet FCF--the ultimate driver of value--is not recovering and in fact will take a hit in FY15 as CWST spends to complete the clean up of legacy business shutdown, landfill closings, and project discontinuance. The FY15 cash outflow could be $15mm which could push reported FCF to -$5mm to $5mm instead of an expectation of $15mm or more. Without a significant economic upswing CWST has limited options to drive EBITDA to $120mm or more.” Casella Waste Systems closed on Friday at $5.50.