Waste Management rated Outperform in new coverage at Bernstein

[Garbage Truck Ca]
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Bernstein on Wednesday began coverage of Waste Management (WM [https://seekingalpha.com/symbol/WM]) with an Outperform rating, citing improving industry conditions and stronger cash generation ahead. The firm set a price target of $255, suggesting roughly 25% upside from Tuesday’s close.

Analyst Connor Cerniglia wrote that waste collection volumes are expected to rise in the coming quarters, capital expenditures should ease and new renewable energy projects are set to launch. These factors, he said, will together “mark an inflection point in free cash flow,” with Waste Management (WM [https://seekingalpha.com/symbol/WM]) best positioned to benefit.

Bernstein also issued an Outperform rating on Waste Connections (WCN [https://seekingalpha.com/symbol/WCN]) with a $200 target, pointing to similar industry dynamics, while assigning Republic Services (RSG [https://seekingalpha.com/symbol/RSG]) a Market Perform at $205, calling its valuation “fair.”

In other industrial coverage, Cerniglia rated Ferguson (FERG [https://seekingalpha.com/symbol/FERG]) Outperform with a $288 target, describing it as the “highest risk but highest potential reward” name due to its exposure to the expanding data center market.

He initiated Fastenal (FAST [https://seekingalpha.com/symbol/FAST]) at Underperform with a $38 target, noting that shares are up 15% this year and that “a meaningful improvement in the core business is far from certain.” W.W. Grainger (GWW [https://seekingalpha.com/symbol/GWW]) received a Market Perform at $975, with the analyst more cautious than consensus on margin prospects.

Rollins (ROL [https://seekingalpha.com/symbol/ROL]) was rated Outperform with a $70 target, as Cerniglia expects the pest-control company to deliver multi-year gains through pricing discipline and cost efficiencies. Meanwhile, Cintas (CTAS [https://seekingalpha.com/symbol/CTAS]) was started at Market Perform with a $200 target, as strong historical execution is balanced by a premium valuation.

MORE ON WASTE MANAGEMENT, W.W. GRAINGER, ETC.

* Republic Services: Upgrading To Buy As Growth Outpaces Macro Headwinds [https://seekingalpha.com/article/4841957-republic-services-upgrading-to-buy-as-growth-outpaces-macro-headwinds]
* Waste Management: The Garbage Collector AI Can't Replace [https://seekingalpha.com/article/4840242-waste-management-the-garbage-collector-ai-cant-replace]
* Rollins: All Growth Drivers Are Seeing Good Traction [https://seekingalpha.com/article/4839112-rollins-all-growth-drivers-are-seeing-good-traction]
* Cintas upgraded at Rothschild & Co. Redburn on steady growth, sturdy margins [https://seekingalpha.com/news/4520093-cintas-upgraded-at-rothschild-and-co-redburn-on-steady-growth-sturdy-margins]
* Rollins announces pricing of secondary public offering [https://seekingalpha.com/news/4519962-rollins-announces-pricing-of-secondary-public-offering]