Goldman Sachs said Casella Waste Systems’ strong pricing and growth outlook will ignite the stock. The firm initiated coverage of the landfill and environmental services stock on Thursday with a buy rating, accompanied by a $100 per share price target. Goldman’s forecast implies about 22% upside from Thursday’s $82.03 close. Casella stock has added 3.4% from the start of the year. Analyst Adam Bubes said the company’s strong local market share as well as a promising expansion outlook could underpin double-digit future revenue growth. “Casella has 60% market share within a 50 mile radius of its landfills; the next highest in our coverage is 54%,” Bubes said. “As a result, we see scope for CWST to sustain mid-to-high single digit solid waste pricing.” Bubes added that Casella can also benefit from expanding through mergers and acquisitions, and help continue to drive prices relative to its peers in the industry. “We estimate CWST will have $770 mn [million] of capital to allocate towards M & A over the next three years,” he said. — CNBC’s Michael Bloom contributed to this report.
