NEW YORK (AP) -- Shares of Clean Harbors Inc. rose Thursday after an analyst upgraded the environmental services company
THE SPARK: Robert W. Baird & Co. analyst David Manthey raised his rating on the shares to "Outperform" from "Neutral" and increased his price target to $61 per share from $59.
Manthey said Clean Harbors' stock has been relatively weak over the last year because of concerns about the state of the energy service industry and the company's recent $1.25 billion acquisition of Safety-Kleen. But expectations for the company appear to be low, which gives Clean Harbors a chance to surpass Wall Street's estimates.
He said the use of oil and gas rigs in Canada appears to be picking up, which should lead to greater revenue growth from the company's oil and gas field service unit.
THE BIG PICTURE: Clean Harbors bought Safety-Kleen in a deal that closed in late December. Safety-Kleen is a re-refiner and recycler of used oil and provides parts cleaning and environmental services. Clean Harbors said it is looking to enter smaller markets and expand its waste treatment capabilities.
The Norwell, Mass., company's fourth-quarter revenue topped analyst estimates. Clean Harbors' revenue rose 10 percent to $2.19 billion in 2012, and it expects growth of about 70 percent, to a range between $3.72 billion to $3.77 billion, in 2013.
In the fourth quarter the company said field service revenue climbed 32 percent, partly because of clean-up work related to Superstorm Sandy. Revenue at the its technical services division, the largest unit in the company, increased 2 percent on strong demand for its incinerators and landfills, and industrial services revenue rose 14 percent because of work on lodging, specialty services and oil sands.
SHARE ACTION: Clean Harbors shares gained $1.89, or 3.6 percent, to $53.97 on Thursday. The stock is down about 20 percent over the last year. The shares jumped 18 percent on Oct. 31 after the Safety-Kleen deal was announced and have declined 7.5 percent since then.