Republic Services, Inc. (NYSE:RSG) Just Reported And Analysts Have Been Lifting Their Price Targets
The annual results for Republic Services, Inc. (NYSE:RSG) were released last week, making it a good time to revisit its performance. The result was positive overall - although revenues of US$15b were in line with what the analysts predicted, Republic Services surprised by delivering a statutory profit of US$5.47 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Republic Services
After the latest results, the 19 analysts covering Republic Services are now predicting revenues of US$16.2b in 2024. If met, this would reflect a notable 8.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 7.9% to US$5.94. In the lead-up to this report, the analysts had been modelling revenues of US$15.8b and earnings per share (EPS) of US$5.89 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.
The analysts increased their price target 12% to US$194, perhaps signalling that higher revenues are a strong leading indicator for Republic Services's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Republic Services at US$215 per share, while the most bearish prices it at US$143. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Republic Services' past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 8.1% growth on an annualised basis. That is in line with its 8.9% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 6.7% per year. So although Republic Services is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Republic Services going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Republic Services .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
