Tuesday, an analyst from Baird increased the price target on Clean Harbors (NYSE:CLH) shares, an environmental and industrial services provider, to $242 from $240, while maintaining an Outperform rating on the stock. The revision reflects a more optimistic view of the company's near-term financial performance.
The analyst's previous concerns about a prolonged shutdown at the Deer Park facility have been reassessed, suggesting that the impact may be less significant than initially thought.
Additionally, the demand for Environmental Services (ES) and pricing strength are contributing factors to the improved outlook. Quarter-over-quarter improvements in spreads within the Safety-Kleen Sustainability Solutions (SKSS) segment were also noted as positive indicators.
Baird's revised estimates for Clean Harbors now align more closely with the mean, rather than remaining at the lower end of analyst expectations. This adjustment is based on anticipating a solid performance in the upcoming quarterly report.
Despite the potential disruptions caused by Hurricane Beryl, the analyst does not foresee a major impact on Clean Harbors' third-quarter performance in 2024. The statement suggests confidence that any effects from the hurricane will be manageable and should not significantly deviate from current expectations for the company's financial results.
In other recent news, Clean Harbors Inc . has expanded its borrowing capacity with a $600 million credit facility, providing the company with increased financial flexibility. This agreement, which includes a borrowing base of eligible accounts receivable and cash deposits, is set to expire on June 28, 2029.
In line with this, Oppenheimer raised its price target for Clean Harbors shares to $245, highlighting the company's growth in per- and polyfluoroalkyl substances (PFAS) treatment.
BMO Capital also increased its price target for Clean Harbors to $230, citing strong performance in the company's Environmental Services segment and potential growth in the Safety-Kleen Sustainability Solutions segment. These financial maneuvers underscore Clean Harbors' commitment to maintaining a robust financial foundation and its ability to manage capital needs effectively.
On the earnings front, Clean Harbors exceeded its first-quarter guidance for 2024, reporting a 5% increase in revenue and a 7% rise in adjusted EBITDA. The company's Environmental Services segment contributed significantly to this growth with a 10% revenue boost.
Despite challenges in the base oil and lubricants market, the company remains optimistic about its growth prospects for the remainder of 2024, backed by a strong project pipeline and recent acquisitions. These are recent developments that indicate a positive trajectory for Clean Harbors.
InvestingPro Insights
Following Baird's updated price target for Clean Harbors (NYSE:CLH), real-time data from InvestingPro provides additional context to the company's current financial standing. With a market capitalization of $12.6 billion and a Price/Earnings (P/E) ratio of 33.54 for the last twelve months as of Q1 2024, the company is trading at a high earnings multiple. This could indicate that investors are expecting higher earnings growth in the future. The Price/Book ratio also stands at 5.45, suggesting a premium valuation compared to the company's book value.
InvestingPro Tips highlight that Clean Harbors is trading near its 52-week high with a price at 98.42% of this peak, reflecting a strong performance with a significant price uptick over the last six months, amounting to a 36.18% return. Additionally, the company has been profitable over the last twelve months, and analysts predict it will continue to be profitable this year.
For readers looking to delve deeper into Clean Harbors' financials and future outlook, InvestingPro offers more tips and insights. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 11 additional InvestingPro Tips available, investors can gain a comprehensive understanding of the company's potential and make well-informed decisions.
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