UPDATE: KeyBanc Capital Markets Initiates Republic Services at Hold; Catalysts Offset by Risks

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KeyBanc Capital Markets initiated coverage on Republic Services
RSG
with a Hold rating. KeyBanc Capital Markets commented, "Return to the M&A market and cost takeout initiatives should drive bottom line upside; market position, exposure could result in slower rRecovery relative to peers. … Historically, RSG has added roughly 3.0% to revenue per year (2000-2008) from acquisitions. While we do not anticipate any significant deals, we believe RSG will be active in the market and could layer in $100 million or more (roughly 1% of sales) in acquisition-related revenue in 2012 and 2013. ... With disposal services typically generating the highest incremental margins (and collection with the lowest), given our view that most of the volume degradation is behind us, we would be inclined to own shares with more leverage to a recovery." Republic Services closed at $27.70 on Tuesday.
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Posted In: Analyst ColorPrice TargetInitiationPre-Market OutlookAnalyst RatingsKeyBanc Capital Markets
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