Waste Connections (WCN) Stock Forecast & Price Target

Waste Connections demonstrates a strong financial outlook, as evidenced by an impressive 2.4% year-over-year organic revenue growth in Q2, primarily driven by resilient solid waste core pricing of 6.6%. Continued operational improvements have led to a 70 basis point expansion in underlying solid waste margin, effectively countering the 60 basis point headwind from recycled commodities. Additionally, with expectations of a significant increase in profitability set for 2026 and a projected margin improvement of 60 basis points in the latter half of 2025, the firm's financial trajectory appears favorable.

Waste Connections posted a leverage ratio of approximately 2.7x at the end of Q2, reflecting a slight improvement year-over-year and quarter-over-quarter; however, this level may indicate potential vulnerability, considering broader economic pressures. The firm is facing forecasted challenges in solid waste volumes, with management predicting a 0.5% decline relative to earlier expectations, compounded by significant headwinds in recycled commodity prices that could detract an estimated $30 million from the latter half of the year. Furthermore, the company reported a continued decline in volume of -2.6%, driven by macroeconomic uncertainties and the ongoing adjustment of operations to eliminate lower-quality waste streams.