We reaffirm our Underperform recommendation on
Republic Services, Inc.
) with a target price of $24. The company's third-quarter 2012
adjusted earnings of $0.47 per share missed the Zacks Consensus
Estimate of $0.49 and were also behind the year-ago adjusted
earnings of $0.53.
Total revenues decreased 3.3% year over year to $2.047 billion,
trailing behind the Zacks Consensus Estimate of $2.115 billion for
the quarter. The top line declined due to reduction in fuel
surcharge, volumes and recycling commodities pricing, partially
offset by inflationary effect of core prices and acquisitions (net
The company intends to spend nearly $30 million in restructuring
activities, thereby contracting margins in the next quarter. Our
price target of $24 is based on 12.6x our fiscal 2013 earnings
estimate of $1.90 per share.
REPUBLIC SVCS (RSG): Free Stock Analysis Report
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