Waste Connections (WCN) Stock Forecast & Price Target

Waste Connections demonstrates a solid financial outlook, reflected in an adjusted EBITDA margin increase of 12 basis points year-over-year and continued improvements in voluntary turnover metrics. The firm achieved a 2.4% year-over-year organic revenue growth in the second quarter, primarily driven by resilient solid waste core pricing of 6.6%, which, coupled with operational enhancements, led to same-store margin expansion despite external headwinds. Furthermore, guidance for 2025 indicates expectations for an additional 60 basis points of margin improvement in the second half of the year, bolstering the company's long-term profitability prospects.

Waste Connections's leverage remains elevated at approximately 2.7x Net Debt/Adjusted EBITDA, showing marginal improvement but still indicating a degree of financial risk in a potentially volatile market. The firm has revised its guidance for 2025, forecasting a decline in Solid Waste volumes by about 0.5%, alongside significant headwinds from recycled commodity and Renewable Identification Number (RIN) prices, which could impact revenue negatively by an estimated $30 million. Additionally, the company experienced weak volume growth, reported at -2.6%, exacerbated by macroeconomic uncertainties and a strategic decision to eliminate low-quality volumes, suggesting ongoing challenges in sustaining revenue growth.