Waste Connections (WCN) Stock Forecast & Price Target

Waste Connections demonstrates a positive outlook due to its strong financial performance, characterized by a 2.4% year-over-year organic revenue growth in Q2, primarily driven by a resilient solid waste core pricing increase of 6.6%. Additionally, the company has achieved an underlying solid waste margin expansion of 70 basis points year-over-year, which offsets challenges from recycled commodities and Renewable Identification Numbers (RINs). Furthermore, the expectation of profitability ramping up more meaningfully in 2026, alongside guidance for an additional 60 basis points of margin improvement in the second half of 2025, reinforces a favorable trajectory for the firm's financial health.

Waste Connections faces a challenging financial outlook due to a combination of declining solid waste volumes and significant headwinds from recycled commodity prices. The firm reported a slight decrease in leverage, with a Net Debt/Adjusted EBITDA ratio of approximately 2.7x, but this improvement is overshadowed by a projected 0.5% reduction in Solid Waste volumes for 2025 and a $30 million financial impact from lower recycled commodity and Renewable Identification Number (RIN) prices. Additionally, a year-over-year volume decline of 2.6% raises concerns about demand stability in the face of macroeconomic uncertainties, particularly in the construction sector.