Republic Services (RSG) Stock Forecast & Price Target

Republic Services reported an impressive 34.3% margin in its Solid Waste segment with AEBITDA reaching $1.295 billion, surpassing estimates and reflecting a 150 basis points improvement year-over-year. The company demonstrated robust operational performance by achieving 5% and 9% growth in revenue and EBITDA, respectively, while maintaining a strong free cash flow of $771 million, which has increased by 32% year-over-year. Furthermore, management's outlook for 2026 suggests continued mid-single digit revenue growth and an acceleration in EBITDA, EPS, and free cash flow growth, indicating a favorable long-term financial trajectory despite current macroeconomic challenges.

The financial outlook for Republic Services appears negative due to significant challenges in its core business segments, with recycled commodity prices plummeting by 29% year-over-year, paired with a notable decline in Environmental Solutions revenue (down 7%) and EBITDA (down 26%). Furthermore, the ongoing weakness in manufacturing and residential volume is anticipated to create a $100 million headwind in 2026 from event-driven revenue, limiting any potential recovery. Despite a slight increase in annual revenue guidance, the overall performance is tempered by a decline in collection and landfill volumes, along with a modest adjustment in EBITDA margin expectations that reflects ongoing pressures from commodity markets.