RSG - Embedded Expectations Analysis - 2021 08 06
Republic Services, Inc. (RSG:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 30.0x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about pricing, growth opportunities, and their RISE platform.Specifically, management may have concerns about the impact of the seasonality on their guidance and the degree to which the RISE rollout will improve productivity. In addition, they may lack confidence in their ability to control their SG&A expenses, get a fair and favorable price index, and execute an acquisitive strategy that increases long-term shareholder value. Also, management may have concerns about the decline in their environmental solutions revenue and the degree to which they can use data from the Great Recession to contextualize pandemic pricing pressures. Moreover, they may be exaggerating the profitability of their investments and the remaining growth opportunities for medium-sized landfills.
Republic Services is a provider of non-hazardous solid waste collection, transfer, disposal, recycling, and environmental services in the United States. The company operates through collection operations, transfer stations, active landfills, recycling processing centers, treatment, recovery and disposal facilities, salt water disposal wells, and deep injection wells. In addition, the company is engaged in landfill gas-to-energy and renewable energy projects and had post-closure responsibility for closed landfills. The company's operations primarily consist of providing collection, transfer and disposal of non-hazardous solid waste, recovering and recycling of certain materials, and environmental services.
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