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Republic Services, Inc. (NYSE:RSG) Analysts Are Pretty Bullish On The Stock After Recent Results
Republic Services, Inc. (NYSE:RSG) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results overall were respectable, with statutory earnings of US$1.93 per share roughly in line with what the analysts had forecast. Revenues of US$4.6b came in 3.2% ahead of analyst predictions. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Republic Services' 24 analysts is for revenues of US$18.3b in 2027. This reflects a modest 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 11% to US$8.10. Before this earnings report, the analysts had been forecasting revenues of US$18.2b and earnings per share (EPS) of US$8.10 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Republic Services
The consensus price target rose 5.0% to US$256despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Republic Services' earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Republic Services at US$281 per share, while the most bearish prices it at US$215. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Republic Services is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Republic Services' revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2027 being well below the historical 8.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Republic Services is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Republic Services going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Republic Services that you need to take into consideration.
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