Stock of the Day

February 25, 2022

Republic Services (RSG)

$229.89
+$5.45 (+2.4%)
Market Cap: $68.73B

About Republic Services

Republic Services, Inc., together with its subsidiaries, offers environmental services in the United States and Canada. It is involved in the collection and processing of recyclable, solid waste, and industrial waste materials; transportation and disposal of non-hazardous and hazardous waste streams; and other environmental solutions. Its residential collection services include curbside collection of material for transport to transfer stations, landfills, recycling centers, and organics processing facilities; supply of recycling and waste containers; and renting of compactors. The company also engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill services. It serves small-container, large-container, and residential customers. The company was incorporated in 1996 and is based in Phoenix, Arizona.

Republic Services Bull Case

Here are some ways that investors could benefit from investing in Republic Services, Inc.:

  • Republic Services, Inc. recently broke ground on a state-of-the-art recycling center in Bridgeton, Missouri, which is expected to support economic growth and expand recycling capabilities in the greater St. Louis region, signaling continued investment in infrastructure and sustainability initiatives.
  • The company demonstrated strong pricing power and financial flexibility by raising its 2026 earnings per share guidance to a range of $7.23 to $7.28, which exceeds the consensus estimate of $7.29, while also increasing its quarterly dividend to $0.67 per share, representing an annualized yield of approximately 1.3%.
  • Republic Services, Inc. has shown consistent earnings beats, reporting $1.85 in earnings per share for the most recent quarter, which topped analysts' consensus estimates of $1.81, alongside revenue of $4.43 billion that exceeded expectations of $4.36 billion, indicating robust operational performance.
  • Major shareholder Cascade Investment, L.L.C. has been actively purchasing shares, buying over 3 million shares in September 2026 at average prices ranging from $221.31 to $224.81, which suggests significant insider confidence in the company's long-term value proposition.
  • The stock is currently trading at $229.89, which is below the consensus price target of $245.26, suggesting potential upside of approximately 6.8% as analysts maintain a Moderate Buy rating based on the company's stable cash flows and defensive market position.

Republic Services Bear Case

Investors should be bearish about investing in Republic Services, Inc. for these reasons:

  • Deutsche Bank Aktiengesellschaft recently cut its price objective for Republic Services, Inc. from $270.00 to $258.00, reflecting a more cautious outlook on the stock's valuation despite the company's strong fundamentals.
  • The company faces rising debt and interest costs, with a debt-to-equity ratio of 1.12, which could pressure financial flexibility and limit the company's ability to invest in growth initiatives or return capital to shareholders.
  • Republic Services, Inc. trades at a premium valuation with a P/E ratio of 32.56, which is higher than the industry average, potentially leaving little room for error if earnings growth slows or if interest rates remain elevated.
  • Short interest has increased slightly, with shares shorted rising to 4.82 million in September 2026 from 4.94 million in the previous month, indicating that some investors are betting against the stock's future performance.
  • The company's current ratio of 0.64 suggests that its short-term liabilities exceed its current assets, which could pose liquidity challenges if the company faces unexpected expenses or if credit markets tighten.
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