Citing relatively more stable earnings growth, Barclays has started coverage of Advanced Disposal Services Inc
In addition to Barclays' initiation,
Barclays noted that Advanced Disposal becomes its
“ADSW has a relatively more stable earnings profile due to its lower recycled commodity (2 percent of revenue) and E&P waste exposure (1 percent) compared to MSW peers,” analyst Jon Windham wrote in a note.
However, Windham expects the company to increase the pace of tuck-in acquisitions, which should boost revenue growth to an average of 5.4 percent annually in 2017 and 2018, compared to 3.6 percent for Republic Services, Inc.
That said, the analyst expects the company
“[W]e estimate that ADSW will reach 3.3x net debt to adj. EBITDA by YE2019E, in line with average MSW net debt to adj. EDITBA of 3.1x. We estimate that each 1-turn reduction in leverage would increase the share price by ~$5, at a constant EV/EBITDA multiple,” Windham added.
At the time of writing, shares of Advanced Disposal were up 0.75 percent to $20.25.
|Oct 2016||Macquarie||Initiates Coverage On||Outperform|
|Oct 2016||First Analysis||Initiates Coverage On||Overweight|
|Oct 2016||Bank of America||Initiates Coverage On||Neutral|
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