Solid Waste Stocks Seen Moving Higher at Stifel (WCN, CWST, GFL, RSG, WM)

The solid waste sector is garnering increased attention from analysts, with Stifel initiating coverage with generally positive outlooks. Waste Connections (WCN) in particular, is highlighted for its differentiated strategy and growth potential, with the firm setting a Buy rating and a $221 price target. The markets are reacting positively to the renewed coverage and optimistic projections for the sector, with WCN up slightly in the pre-market (+0.14%)

Stifel's analysis points to Waste Connections' unique market positioning, with 40% of its revenue stemming from exclusive or franchise contracts, and the majority of the remainder derived from secondary and rural markets. This strategic focus, coupled with an active acquisition strategy, places the company in a favorable position for continued expansion. The analyst sees a “long runway” for further M&A activity.

Waste Connections has demonstrated a strong commitment to growth through acquisitions, evidenced by its leading position in acquisition spending in Q3 2024. The company invested $573.2 million during the quarter, including the purchase of Royal Waste Services in New York City.

This aggressive approach puts Waste Connections on track to exceed its previous M&A spending record for the year, with year-to-date acquisitions totaling $2.01 billion. This activity showcases the company's commitment to expanding its footprint and market share.

Other Players in the Sector Initiated With Bullish Targets

Other key players in the solid waste sector are also receiving positive attention from Stifel. GFL Environmental (GFL), Republic Services (RSG), Waste Management (WM), and Casella Waste Systems (CWST) all received Buy ratings, with price targets of C$86, $257, $252, and $113, respectively. Each company exhibits distinct strengths and growth drivers.

Casella Waste Systems (CWST)

Casella Waste Systems reported strong Q2 2025 results, with revenue up 23.4% and adjusted EBITDA increasing by 19.5% year-over-year. Solid waste revenues rose 14.9%, supported by a 5.0% pricing increase.

The company completed three acquisitions totaling $72 million in Q2. Leadership transition plans, with current CEO John Casella becoming executive chairman in 2026 and President Ned Coletta assuming the CEO role, could also be influencing current market sentiment.

GFL Environmental (GFL)

GFL Environmental reported a 9.0% increase in revenue and a 13.8% rise in adjusted EBITDA in Q1 2025, excluding results from GFL Environmental Services. These gains were driven by acquisitions, divestitures, and organic growth, supported by pricing strategies and volume changes.

Proceeds from the sale of its Environmental Services business were used to reduce net leverage to 3.1x, the lowest in its history, potentially making it more attractive to markets.

Republic Services (RSG)

Republic Services completed the acquisition of GFL Environmental's Colorado and New Mexico operations in June 2023. The acquired assets include recycling, collection, and disposal operations in multiple markets, reinforcing Republic's commitment to these communities.

Waste Management (WM)

Waste Management reported a 19.0% increase in revenue and an 18.9% rise in adjusted EBITDA in Q2 2025. Solid waste revenue grew by 17.5%, driven by strong organic growth and margin expansion in the collection and disposal business. The company achieved its best-ever operating expense margin, with MSW volumes up 4.5% year-over-year and additional growth from special waste related to wildfire cleanup in California.

The solid waste sector's overall financial health and strategic moves are driving positive sentiment among analysts, with Stifel's renewed coverage reinforcing this view. The market is likely to continue monitoring these companies' performance and strategic decisions in the coming quarters. The sector's resilience and growth prospects suggest that the upward trend in stock prices may persist.