Waste Connections, Inc. (NYSE:WCN) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to US$98.80 in the week after its latest quarterly results. The result was positive overall - although revenues of US$1.4b were in line with what the analysts predicted, Waste Connections surprised by delivering a statutory profit of US$0.60 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Waste Connections
Taking into account the latest results, the current consensus from Waste Connections' 17 analysts is for revenues of US$5.84b in 2021, which would reflect a reasonable 7.9% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 228% to US$2.58. In the lead-up to this report, the analysts had been modelling revenues of US$5.84b and earnings per share (EPS) of US$2.61 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$118, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Waste Connections analyst has a price target of US$150 per share, while the most pessimistic values it at US$100.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Waste Connections' revenue growth is expected to slow, with forecast 7.9% increase next year well below the historical 17%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.0% next year. So it's pretty clear that, while Waste Connections' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Waste Connections going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 4 warning signs for Waste Connections that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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