Republic Services (RSG) Stock Forecast & Price Target

Republic Services demonstrated a solid financial performance in the recent quarter, with AEBITDA of $1.295 billion reflecting a margin improvement of 150 basis points year-over-year, significantly surpassing estimates. The company's ability to drive revenue and EBITDA growth, particularly in its Recycling & Waste segment—posting 5% revenue growth and 9% EBITDA growth—illustrates strong operational effectiveness amid challenging market conditions. Furthermore, Republic Services anticipates sustained long-term growth, projecting mid-single-digit revenue increases and accelerating EBITDA and free cash flow growth, along with continued margin expansion, signaling a robust outlook for the company moving into 2026.

The financial outlook for Republic Services is negatively impacted by a significant decline in recycled commodity prices, which averaged -29% year-over-year, along with a 7% decline in environmental services revenue and a notable 26% drop in EBITDA due to soft manufacturing and reduced landfill activity. The company's expectation of a $100 million headwind in 2026 from declining event-driven revenue further exacerbates concerns about future volume, which is projected to remain flat to slightly down without a recovery in housing and manufacturing activities. Additionally, while the company reported higher-than-expected AEBITDA and free cash flow, the trimming of revenue guidance to the lower end of the range, paired with a minimal anticipated EBITDA margin expansion of just 10 basis points, reflects growing challenges and uncertainty in a declining market environment.