Wunderlich Securities Reiterates Buy, $40 Target on Waste Connections

Wunderlich Securities reiterates its Buy rating and $40 target price on Waste Connections (NYSE: WCN) as it expects the company to report an in-line 4Q11 by overcoming commodity pressures. Wunderlich Securities notes, "Weather and fuel prices should not be an issue in 4Q11. There has been minimal snow and diesel prices are flat sequentially and up materially yr./yr. The focus should be on core waste fundamentals and the headwind from lower OCC prices. We expect core internal growth of 2.3% and a 50 bps decline in volume. In FY12 lower OCC paper prices are a challenge, but we believe it can be offset by strong core pricing and cost efficiencies to maintain flat margins yr./yr. We look for WCN to meet or exceed our 4Q11 estimates and provide a strong outlook for 2012 with FCF at least flat if not up."WCN closed at $32.27 a share yesterday.