Republic Services (RSG) Stock Forecast & Price Target

Republic Services has demonstrated strong financial performance with solid waste AEBITDA reaching $1.295 billion and a robust margin of 34.3%, which reflects a year-over-year increase of 150 basis points, significantly surpassing estimates. The company achieved a free cash flow of $771 million, marking a substantial 32% year-over-year increase, and management anticipates mid-single digit revenue growth alongside improved EBITDA, EPS, and free cash flow growth heading into 2026. Additionally, the growth in the recycling and waste sector, alongside stabilized demand and an expanding growth pipeline, positions Republic Services favorably for sustained profitability amid challenging market conditions.

The financial outlook for Republic Services is concerning due to a significant decline in recycled commodity prices, averaging -29% year-over-year, which has adversely impacted revenues in the environmental services (ES) segment, leading to a 7% drop in revenue and a 26% decrease in EBITDA. The company has indicated a challenging environment characterized by reduced activity in manufacturing and lower volumes from landfills, which are expected to persist, potentially resulting in a $100 million revenue hit in 2026 from event-driven revenue that is unlikely to recover. Furthermore, despite a mixed quarter with higher-than-expected adjusted EBITDA and free cash flow, the trimming of the full-year revenue outlook to the low end of guidance and a minimal anticipated EBITDA margin expansion of just 10 basis points reflect ongoing operational weaknesses that could negatively affect investor sentiment.