UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Lowers PT on Progressive Waste Solutions

In a report published Monday, BMO Capital Markets reiterated its Market Perform rating on Progressive Waste Solutions BIN, but slightly lowered its price target from $22.00 to $21.00. BMO Capital noted, “Despite a competitive operating environment, core price was up 1.6% (+2.2% in Canada, +1.2% in U.S.), consistent with Q2/12, and the rate of margin pressure moderated from H1/12 (EBITDA margin declined 60 bps vs. 110 bps in Q2/12 and 260 bps in Q1/12). In the beleaguered U.S. Northeast segment, the EBITDA margin improved 20 bps sequentially, despite a 70 bps headwind from the decline in recycled commodity prices. BIN completed three deals for collection companies late in the quarter for $73 million (~$53 million in revenue), including two in the U.S. Northeast and the third in Canada. We believe the acquisitions in the U.S. Northeast should help increase internal waste volume at landfills to partially offset the decline in disposal volumes in this segment. Notwithstanding these factors, we are cautious given the competitive operating environment and the 2.9% volume decline in the Canadian business (~50% of EBITDA), which is the first period in 12 quarters where organic volumes fell in this segment. We rate Progressive Market Perform.” Progressive Waste Solutions closed on Friday at $19.11.