Could you please pass on your opinion on WCN after their latest earnings-do you deem a long term hold, despite it's choppy trading?
Thank you
EPS of $1.02 matched estimates; revenue of $2.02B also matched. Profit fell 6.6%, and it did lower (slightly) some 2023 guidance targets. But Waste Connections' generally solid 2Q earnings should still refute any concerns that the CEO change announced in April may signal a deterioration in its performance. Solid-waste revenue grew 5% internally, with price increases offsetting declines in volume, recycling and FX. Ebitda margin nearly held flat after contracting over 400 bps in 1Q, reflecting price increases and moderating cost inflation. Ebitda guidance for 2023 was raised despite a lower volume outlook that reflects the shedding of several low-margin contracts. Strong free cash flow enabled Waste Connections to fund over $400 million of acquisition spending in 2Q. The deal pace is expected to remain elevated, suggesting buybacks may stay on hold, with leverage near the high end of the historical 2-3x range. WCN is 'pricey' at 33X earnings but we would be fine holding it.