Q3 2023 Earnings Summary
Reported on Oct 26, 2023 (After Market Close)
Pre-Earnings Price$146.02Last close (Oct 26, 2023)
Post-Earnings Price$148.07Open (Oct 27, 2023)
Price Change
$2.05(+1.40%)
- Bull case for Republic Services ($RSG):*
- Margin Expansion Expected in 2024: Management anticipates continued margin expansion in 2024, driven by pricing ahead of cost inflation and contributions from sustainability investments, including plastic circularity and renewable natural gas projects. ,
- Cost Inflation Moderating and Operational Improvements: The company is experiencing moderation in cost inflation, with improvements in equipment availability and employee retention, leading to lower labor and maintenance costs and enhancing margins.
- Price increases have led to volume loss in some areas, indicating limits to the company's pricing power. The CEO stated, "We've lost some volume... You don't understand the ceiling on price until you take it there."
- Margin expansion from the Environmental Solutions business is expected to decelerate in 2024, reducing a key driver of profit growth. The CFO noted, "We would expect that margin expansion to decelerate from what you saw in '23."
- Weakness in construction activity is negatively impacting volume growth in the recycling and solid waste business, with the company noting they are "on the lower end" of volume growth due to construction being "a soft spot".
Research analysts covering REPUBLIC SERVICES.