On Monday, TD Cowen displayed confidence in GFL Environmental (NYSE:GFL), adjusting the stock's price target upward to $43.00 from the previous $42.00, while reiterating a Buy rating on the shares. The firm's analyst cited a strong start to 2024, with first-quarter earnings surpassing expectations and the company's full-year EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance receiving a modest upward revision.
The analyst highlighted GFL Environmental's firm commitment to achieving its year-end leverage targets for both this year and the next. This dedication is seen as a positive driver for the stock, especially as the company's valuation multiples remain attractive compared to its solid waste industry peers. GFL's current valuation reflects a three-turn discount, making it stand out in the market.
GFL Environmental’s financial health appears to be on a positive trajectory, with the analyst noting improvements in the company's margins, balance sheet, and free cash flow (FCF) trends. These factors are anticipated to contribute to a gradual equalization of valuation multiples with those of industry counterparts in the upcoming quarters.
The company's revised full-year EBITDA guidance and commitment to financial targets underscore a forward-looking optimism about its operational and financial performance. The upward adjustment in price target by TD Cowen reflects a belief in GFL Environmental's potential for continued growth and market re-rating.
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