Clean Harbors (CLH) Stock Forecast & Price Target

Clean Harbors Inc. demonstrated strong financial performance with a 7% year-over-year increase in revenues to $1.43 billion, meeting consensus expectations, while also achieving an 11% increase in EBITDA to $311 million, surpassing consensus estimates. The company's free cash flow (FCF) is projected in a range of $430 million to $490 million, significantly up from $358 million in the previous year, reflecting its solid financial position and growth potential. Additionally, positive revenue trends in the Technical Services segment, which increased by 8% year-over-year, point to robust demand and effective pricing strategies within Clean Harbors' core markets.

The negative outlook on Clean Harbors's stock is primarily driven by a substantial contraction in EBITDA margins, which decreased by 170 basis points quarter-over-quarter to 18.0%, and by 100 basis points year-over-year. Additionally, the Safety-Kleen Sustainability Solutions (SKSS) segment experienced a 5% decline in revenues year-over-year, largely due to weak demand and pricing pressures, resulting in a significant 47% year-over-year drop in EBITDA to $24.6 million. This downturn in performance, coupled with forecasts indicating a continued decline in EBITDA, underscores concerns about the company's ability to recover in the near term.