Waste Connections (WCN) Stock Forecast & Price Target

Waste Connections demonstrates a positive financial outlook, characterized by a 2.4% year-over-year organic revenue increase in Q2, primarily driven by a resilient solid waste core pricing of 6.6%. The firm's adjusted EBITDA margin experienced an improvement of 12 basis points year-over-year, supported by ongoing operational enhancements and a decline in voluntary turnover. Furthermore, the underlying solid waste margin expanded by 70 basis points year-over-year, indicating strong profitability potential, with guidance suggesting an additional 60 basis points of margin improvement anticipated in the second half of 2025.

Waste Connections has demonstrated a relatively stable leverage ratio at approximately 2.7x Net Debt/Adjusted EBITDA, indicating effective management of debt; however, this must be viewed in light of declining solid waste volumes forecasted to worsen by 0.5% compared to initial expectations. The company's performance has been further impacted by significant headwinds in recycled commodity and Renewable Identification Number (RIN) prices, leading to anticipated losses of $25 million and $5 million, respectively, in the second half of the year. Additionally, ongoing macro and tariff uncertainties have manifested in weak volume growth of -2.6%, reflecting challenges in the construction end markets and the firm's ongoing strategy of shedding low-quality volumes.