Waste Connections (WCN) Stock Forecast & Price Target

Waste Connections demonstrates a positive outlook due to its consistent revenue growth, highlighted by a 2.4% year-over-year organic revenue increase in Q2, primarily driven by strong solid waste pricing of 6.6%. The company has shown effective cost management, with underlying solid waste margins expanding by 70 basis points year-over-year, which offsets external pressures from recycled commodity prices. Additionally, the anticipated ramp-up in profitability towards 2026, supported by improvements in voluntary turnover and further margin guidance, reinforces the firm's robust financial position.

Waste Connections is facing a negative outlook primarily due to weak volume performance, which declined by 2.6% in Q2, reflecting ongoing macroeconomic and tariff uncertainties that impact construction markets. Additionally, the firm has revised its 2025 guidance downward, indicating that solid waste volumes are expected to be approximately 0.5% worse than initially anticipated, coupled with significant headwinds from recycled commodity prices, creating a $30 million impact for the second half of the year. Furthermore, despite some improvements in employee turnover rates, the overall business environment, compounded by a 10%-15% pullback in commodity prices such as OCC and RIN—averaging a 30% year-over-year decline—raises concerns over revenue stability and future profitability.