UPDATE: Wunderlich Securities Reiterates On Casella Waste Systems On Transition Year To Better FCF
In a report published Friday, Wunderlich Securities analyst Michael E. Hoffman reiterated a Hold rating on Casella Waste Systems (NASDAQ: CWST), but lowered the price target from $6.00 to $5.50.
In the report, Wunderlich Securities noted, “We maintain our Hold rating but are lowering our target to $5.50 on shares of Casella Waste (CWST). Time will tell if the wait-and-see plan was better than the time-value-of-money approach. It is reasonable to conclude CWST has significantly changed - stripping away distractions and businesses that could not be counted to reliably produce decent margins, FCF, and ROIC. CWST has now asked to be given time to show it can return the business model to FCF of low-to-mid-single digit percent of sales.
"FCF in CY14 will be negative - as much as $(12)mm - and possibly more without some working capital help. Then CY15 FCF has to swing $26mm to the positive for a range of $14mm-$18mm. Working capital is a meaningful factor in this swing but net income has to cut the CY14 loss by half as well.”
Casella Waste Systems closed on Thursday at $5.07.
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