Zacks Investment Research Lowers Republic Services (RSG) to Sell

Republic Services (NYSE:RSG) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Monday.

According to Zacks, “Republic Services' performance is likely to be hurt by protracted weakness in special waste, industrial volumes and tight municipal budgets. Changing regulations impose new compliance requirements on Republic Services, which may alter its current method of doing business and ultimately increase costs and compress margins. The ability to adequately increase pricing to offset wage and other cost inflation to avoid margin erosion remains another concern. Nevertheless, the company continues to generate significant free cash flow, which is utilized for increased dividend payment, repurchasing shares and strategic acquisitions. It is currently focusing on a series of quality acquisition opportunities for a healthy long-term growth. It is also transitioning to a fee-based recycling processing model to cover processing costs and generate a healthy ROI. The stock has underperformed the industry in the past year.”

Several other brokerages also recently weighed in on RSG. UBS assumed coverage on Republic Services in a research note on Wednesday, March 14th. They set a “buy” rating and a $78.00 target price for the company. Bank of America upped their target price on Republic Services from $70.00 to $73.00 and gave the stock a “buy” rating in a research note on Monday, February 5th. Stifel Nicolaus raised Republic Services from a “hold” rating to a “buy” rating and upped their target price for the stock from $70.00 to $73.00 in a research note on Thursday, January 4th. Raymond James Financial downgraded Republic Services from a “strong-buy” rating to a “market perform” rating and set a $72.00 target price for the company. in a research note on Wednesday, April 11th. Finally, Credit Suisse Group dropped their price target on Republic Services from $67.00 to $64.00 and set a “neutral” rating for the company in a research report on Monday, February 12th. Two analysts have rated the stock with a sell rating, six have issued a hold rating and four have given a buy rating to the stock. The company currently has a consensus rating of “Hold” and a consensus target price of $70.50.

Shares of RSG stock traded up $0.25 during trading hours on Monday, hitting $65.77. 518,835 shares of the company’s stock were exchanged, compared to its average volume of 1,801,198. The company has a debt-to-equity ratio of 0.94, a current ratio of 0.55 and a quick ratio of 0.55. The company has a market cap of $21,701.11, a price-to-earnings ratio of 27.06, a PEG ratio of 2.09 and a beta of 0.54. Republic Services has a fifty-two week low of $60.26 and a fifty-two week high of $69.40.

Republic Services (NYSE:RSG) last announced its earnings results on Thursday, February 8th. The business services provider reported $0.61 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $0.57 by $0.04. The business had revenue of $2.56 billion during the quarter, compared to the consensus estimate of $2.52 billion. Republic Services had a return on equity of 10.61% and a net margin of 12.73%. The business’s quarterly revenue was up 7.6% on a year-over-year basis. During the same period in the prior year, the company posted $0.57 EPS. analysts anticipate that Republic Services will post 3.06 earnings per share for the current fiscal year.

In related news, CAO Brian A. Goebel sold 1,290 shares of the business’s stock in a transaction that occurred on Wednesday, January 17th. The stock was sold at an average price of $68.44, for a total transaction of $88,287.60. Following the completion of the sale, the chief accounting officer now directly owns 6,696 shares in the company, valued at $458,274.24. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, COO Ark Jon Vander sold 9,236 shares of the business’s stock in a transaction that occurred on Wednesday, March 21st. The stock was sold at an average price of $68.45, for a total value of $632,204.20. Following the sale, the chief operating officer now owns 12,011 shares of the company’s stock, valued at $822,152.95. The disclosure for this sale can be found here. Insiders have sold 28,364 shares of company stock valued at $1,915,201 over the last quarter. 0.30% of the stock is owned by company insiders.

Several institutional investors and hedge funds have recently modified their holdings of the stock. SeaCrest Wealth Management LLC purchased a new stake in Republic Services in the 4th quarter valued at $121,000. Benjamin F. Edwards & Company Inc. grew its holdings in Republic Services by 507.7% in the 4th quarter. Benjamin F. Edwards & Company Inc. now owns 1,823 shares of the business services provider’s stock valued at $123,000 after buying an additional 1,523 shares in the last quarter. Tower Research Capital LLC TRC grew its holdings in Republic Services by 1,070.1% in the 4th quarter. Tower Research Capital LLC TRC now owns 2,937 shares of the business services provider’s stock valued at $199,000 after buying an additional 2,686 shares in the last quarter. Focused Wealth Management Inc purchased a new stake in Republic Services in the 4th quarter valued at $199,000. Finally, Welch & Forbes LLC purchased a new stake in Republic Services in the 4th quarter valued at $201,000. Hedge funds and other institutional investors own 60.99% of the company’s stock.

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Republic Services Company Profile

Republic Services, Inc, together with its subsidiaries, provides non-hazardous solid waste collection, transfer, recycling, disposal, and energy services for small-container, large-container, municipal and residential, and energy services customers in the United States and Puerto Rico. The company's collection services include curbside collection of waste for transport to transfer stations; supply of waste containers; and renting of compactors.

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