Clean Harbors
CLH
$320.06
+0.09%
Clean Harbors, Inc. is a leading environmental and industrial services provider operating through two segments: Environmental Services (waste collection, transportation, treatment, recycling, disposal, and industrial maintenance) and Safety-Kleen Sustainability Solutions (used oil collection and re-refining into base oil, vacuum gas oil, and lubricants). The company is the largest player in North America's hazardous waste disposal market, distinguished by an unmatched network of incinerators, landfills, and treatment facilities that create high barriers to entry and a vertically integrated moat. The current investor narrative centers on a reacceleration in Environmental Services growth, with Q2 2026 revenue up 11.95% year-over-year to $1.735 billion and diluted EPS of $3.22, alongside a string of buy-rated analyst reiterations following the late-July earnings release. Debate now hinges on whether the Safety-Kleen re-refining business can sustain margin recovery amid volatile base oil spreads, and whether the company's aggressive acquisition and capital expenditure program will translate into durable free cash flow after a cash-flow-negative first half.…
CLH
Clean Harbors
$320.06
Investment Opinion: Should I buy CLH Today?
Rating: Buy. The core thesis is that Clean Harbors is a high-quality, moat-protected environmental services compounder whose revenue reaccelerated to 11.95% YoY in Q2 2026 while operating margins expanded to 15.50%, and the entire 15-analyst cohort carries targets above the current price, with a consensus 'buy' rating (mean 1.59) and an average target of $361.00 implying +12.8% upside. The recent consolidation near $320 appears to be a base rather than a top, supported by the lowest analyst target of $325.00 sitting just above spot.
Supporting evidence is broad: revenue of $1.735 billion grew 11.95% YoY and 18.9% sequentially, the strongest print in the multi-quarter series; operating margin of 15.50% rose from 13.57% a year ago on SG&A leverage; diluted EPS of $3.22 grew 36% from $2.36; and TTM free cash flow of $194.5 million remains positive despite the negative first half. Valuation at 32.08x trailing PE and 13.33x EV/EBITDA is a premium to the high-teens to low-20s industrial average, but it is defensible given 14.24% ROE, 11.17% operating margin, and growth that outpaces mature waste peers. The 2.07x PS ratio and 4.54x P/B are less demanding than the PE suggests, and the PE sits in the upper-middle of its multi-year band rather than at an extreme.
The biggest risks that could invalidate the thesis are a failure to convert the capex and acquisition program into positive second-half free cash flow, further gross margin compression below the current 27.87%, and a Safety-Kleen margin relapse driven by volatile base oil spreads. This Buy would downgrade to Hold if second-half FCF remains negative or if gross margin falls below 25%, and it would upgrade in conviction if FCF turns positive and Safety-Kleen margins normalize toward prior-year levels. On balance, the stock is fairly valued to modestly undervalued relative to its growth and moat, with the premium multiple justified by execution so far.
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CLH 12-Month Price Forecast
The forward view is constructive but not without caveats. Revenue momentum and operating leverage are clearly positive, and the analyst cohort's uniform targets above spot signal confidence in the moat and execution. However, the 32.08x trailing PE and 31.56x forward PE leave little room for error, and the negative first-half free cash flow of -$244.2 million must reverse for the premium to be sustained. I would upgrade to high confidence if Q3 shows positive FCF and gross margin recovery above 30%, and I would downgrade to neutral if FCF remains negative or if relative strength versus SPY continues to deteriorate.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Clean Harbors's 12-month outlook, with a consensus price target around $361.00 and implied upside of +12.8% versus the current price.
Average Target
$361.00
0 analysts
Implied Upside
+12.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$325 - $390
Analyst target range
Coverage is robust, with 15 analysts and a consensus recommendation of "buy" (mean rating of 1.59 on a 1-5 scale where 1 is Strong Buy). The average target price of $361.00 implies +12.8% upside from the current $320.06, and notably even the lowest target of $325.00 sits above the current price — a rare configuration signaling that the entire covering cohort sees the stock as undervalued at present levels. The consensus leans clearly bullish, supported by a cluster of Buy reiterations from Stifel, Needham, TD Cowen, Truist, and Citigroup around the July 30 earnings date, with only Wells Fargo and Barclays maintaining Equal Weight ratings. Consensus EPS of $15.07 and revenue of $8.658 billion for the forward period are consistent with the Q2 run-rate and suggest analysts expect continued mid-to-high single-digit top-line growth.
The target range of $325.00 to $390.00 is moderately wide — a spread of $65, or roughly 18% of the average target — indicating meaningful dispersion in assumptions. The high target of $390.00 (about +21.9% above the average) likely assumes multiple expansion toward the mid-30s PE alongside Safety-Kleen margin normalization and accelerating Environmental Services volumes, while the low target of $325.00 (just +1.5% above spot) prices in flat margins, continued negative free cash flow, and limited re-rating. The institutional ratings flow shows no downgrades in the recent window, with the most recent actions (Wells Fargo and Barclays Equal Weight on July 30-31) representing holds rather than negative revisions, and the absence of any Sell ratings reinforces the constructive stance. The tight clustering of targets above the current price, combined with a beta of 0.875, suggests analysts view the recent consolidation as a base rather than a top — though the wide high-low spread means execution on cash flow and margin recovery will determine whether the stock converges toward the $390 bull case or stalls near the $325 floor.
Bulls vs Bears: CLH Investment Factors
The bull case currently holds stronger evidence: revenue reaccelerated to 11.95% YoY growth with operating margin expansion to 15.50%, analyst targets are uniformly above the current price, and the stock's below-market beta of 0.875 paired with +22.37 one-year relative strength underscores a quality compounder in an uptrend. The bear case rests on negative first-half free cash flow (-$244.2 million combined), gross margin compression of roughly 545 basis points YoY, and a 32.08x trailing PE that prices in continued execution. The single most important tension is whether Safety-Kleen's re-refining margins can normalize and convert the aggressive capex and acquisition program into positive second-half free cash flow; if that happens, the premium multiple is justified and the stock likely converges toward the $361 average target, but if cash conversion stalls, the 31.56x forward PE offers little cushion and the stock could retest the $276-$280 support zone.
Bullish
- Revenue reacceleration with broad segment breadth: Q2 2026 revenue of $1.735 billion grew 11.95% YoY and 18.9% sequentially from Q1 2026's $1.460 billion, the strongest print in the multi-quarter series. Growth was spread across five reporting lines, with Technical Services ($544.9M) and Safety-Kleen Environmental Services ($379.4M) leading, reducing dependence on any single vertical.
- Operating leverage despite gross margin compression: Operating income of $268.9 million produced a 15.50% operating margin, up from 13.57% in Q2 2025 and 12.46% in Q3 2025, even as gross margin fell to 27.87% from 33.32% a year ago. SG&A held at 12.4% of revenue, demonstrating cost discipline that more than offset the mix-driven gross margin decline.
- Analyst targets uniformly above current price: The average target of $361.00 implies +12.8% upside, and even the lowest target of $325.00 sits above the current $320.06, a rare configuration showing the entire 15-analyst cohort sees the stock as undervalued. The consensus recommendation is 'buy' with a mean rating of 1.59, and no Sell ratings exist.
- Defensible moat in hazardous waste infrastructure: CLH's unmatched network of incinerators, landfills, and treatment facilities creates high barriers to entry and supports a 14.24% ROE and 11.17% operating margin, above typical waste-hauler levels. The 11.95% revenue growth also outpaces the low-to-mid single-digit growth of mature peers.
Bearish
- Negative free cash flow in first half: Q1 2026 FCF was -$92.3 million and Q2 2026 FCF was -$151.9 million, driven by a $225.8 million acquisition outlay, $126.0 million of Q2 capex, and a $157.5 million working capital build. TTM FCF of $194.5 million masks the cash-consumptive first half, making second-half conversion a critical watch item.
- Gross margin compression signals mix and cost pressure: Gross margin fell to 27.87% in Q2 2026 from 33.32% in Q2 2025 and 32.33% in Q3 2025, a roughly 545 basis point YoY decline. The TTM gross margin of 29.51% is mid-range for the industry, and continued compression would threaten the operating leverage story.
- Premium valuation versus industrial peers: The trailing PE of 32.08x and EV/EBITDA of 13.33x represent a roughly 40-60% premium to the broader industrial average in the high-teens to low-20s PE range. The forward PE of 31.56x implies only 1.6% earnings growth, leaving little room for multiple compression if execution falters.
- Leverage and liquidity drawdown: Debt-to-equity stands at 1.256 with total debt to capitalization of 50.9%, while cash fell to $103.1 million from $826.3 million at year-end 2025. Sustained negative FCF would force reliance on external financing given this leverage load.
CLH Technical Analysis
CLH is in a sustained uptrend, with the stock up 37.90% over the past year and 31.47% year-to-date, materially outperforming the S&P 500's 15.53% and 11.93% respective gains. At the current price of $320.06, the stock sits at approximately 88% of its 52-week range (low of $201.34, high of $335.94), positioning it in the upper quartile of its annual band. This near-highs positioning signals persistent institutional accumulation and momentum, though it also leaves limited cushion before the stock tests overhead resistance, making it more susceptible to profit-taking on any earnings disappointment. The maximum drawdown of -18.06% over the period confirms that pullbacks have been sharp but shallow relative to the primary trend.
Short-term momentum is positive but decelerating relative to the longer-term trajectory. The stock has gained 0.34% over the past month and 3.05% over three months, a marked slowdown versus the 37.90% one-year advance, indicating the trend is consolidating rather than accelerating. Notably, relative strength versus SPY has turned negative over the one-month (-0.88) and six-month (-1.04) windows even as the one-year relative strength remains strongly positive at +22.37, a classic divergence that often precedes either a resumption of leadership or a deeper mean-reversion phase. The stock's recovery from the May-June dip toward $276 (a roughly 12% drawdown from April levels) back to the $320 area demonstrates resilient dip-buying support, but the flattening price action since August suggests the market is awaiting a fresh catalyst.
Key technical levels are well defined: support rests at the 52-week low of $201.34, with a nearer-term floor around the $276-$280 zone that held during the spring pullback, while resistance sits at the 52-week high of $335.94. A breakout above $335.94 would confirm the uptrend's continuation and likely open a new leg higher, whereas a breakdown below the $276 support would signal a trend reversal and put the $201.34 low in play. With a beta of 0.875, CLH is roughly 12.5% less volatile than the broader market, meaning its 37.90% one-year gain was achieved with below-market systematic risk — an attractive risk-adjusted profile that supports larger position sizing for volatility-aware portfolios. Average volume of roughly 492,000 shares is moderate and warrants attention around earnings dates, when liquidity-driven gaps are more likely.
Beta
0.88
0.88x market volatility
Max Drawdown
-18.1%
Largest decline past year
52-Week Range
$201-$336
Price range past year
Annual Return
+37.9%
Cumulative gain past year
| Period | CLH Return | S&P 500 |
|---|---|---|
| 1m | +0.3% | +0.2% |
| 3m | +3.1% | +2.9% |
| 6m | +6.4% | +8.4% |
| 1y | +37.9% | +14.9% |
| ytd | +31.5% | +11.9% |
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CLH Fundamental Analysis
Revenue is on a clear reacceleration path: Q2 2026 revenue of $1.735 billion grew 11.95% year-over-year versus $1.550 billion in Q2 2025, and rose 18.9% sequentially from Q1 2026's $1.460 billion. The multi-quarter trend is constructive — revenue climbed from $1.432 billion in Q1 2025 to $1.550 billion in Q2 2025, $1.549 billion in Q3 2025, $1.500 billion in Q4 2025, $1.460 billion in Q1 2026, and now $1.735 billion in Q2 2026, with the latest quarter the strongest print in the series. Segment data shows Technical Services ($544.9 million) and Safety-Kleen Environmental Services ($379.4 million) as the largest contributors, followed by Industrial Services ($358.9 million), Field and Emergency Response ($249.0 million), and Safety-Kleen Oil ($202.7 million); the breadth across five reporting lines underscores diversification but also means growth is a blended outcome rather than dependent on a single vertical. The 11.95% YoY growth, if sustained, supports the consensus revenue estimate of $8.658 billion and underpins the bull case for operating leverage.
Profitability is solid and improving at the operating line, though gross margins have compressed. Q2 2026 net income reached $170.5 million (9.82% net margin) on gross profit of $483.5 million, a 27.87% gross margin — down from 33.32% in Q2 2025 and 32.33% in Q3 2025, reflecting mix shift and cost pressures. However, operating income of $268.9 million produced a 15.50% operating margin, up sharply from 13.57% in Q2 2025 and 12.46% in Q3 2025, as SG&A leverage (operating expenses of $214.6 million, or 12.4% of revenue) offset the gross margin decline. The TTM gross margin of 29.51% and operating margin of 11.17% are consistent with the asset-heavy waste management industry, where incineration and landfill economics typically deliver high-20s to low-30s gross margins. Diluted EPS of $3.22 in Q2 2026 versus $2.36 a year ago represents 36% growth, and the trailing EPS of $0.03 in the key metrics field appears to be a data artifact inconsistent with the quarterly income statement, which shows cumulative EPS well above that level.
Balance sheet health is adequate but leverage bears watching. Debt-to-equity stands at 1.256, with total debt to capitalization of 50.9% and long-term debt to capitalization of 48.5%, while the current ratio of 2.33 and quick ratio of 1.80 indicate strong short-term liquidity. Free cash flow is the weak spot: TTM FCF is $194.5 million, but the first half of 2026 was cash-consumptive, with Q1 FCF of -$92.3 million and Q2 FCF of -$151.9 million driven by a $225.8 million acquisition outlay and $126.0 million of capex in Q2 alone, plus a $157.5 million working capital build. ROE of 14.24% and ROA of 6.07% are respectable for a capital-intensive industrial, and the company retains $103.1 million in cash after drawing down from $826.3 million at year-end 2025. The key risk is that sustained negative FCF would force reliance on external financing given the 1.26x debt-to-equity load, making the second-half cash conversion a critical watch item.
Quarterly Revenue
$1.7B
2026-06
Revenue YoY Growth
+11.9%
YoY Comparison
Gross Margin
27.9%
Latest Quarter
Free Cash Flow
$194523000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CLH Overvalued?
Because Clean Harbors is profitable — Q2 2026 net income of $170.5 million and positive trailing earnings — the PE ratio is the appropriate primary metric. The stock trades at a trailing PE of 32.08x versus a forward PE of 31.56x, a narrow 1.6% compression that implies the market expects only modest earnings growth over the next twelve months, consistent with the consensus EPS estimate of $15.07 against a trailing base that already reflects strong Q2 results. The PEG ratio of -15.95 is not meaningful given the sign convention in the data and should be disregarded; the EV/EBITDA of 13.33x and EV/Sales of 3.14x provide cleaner cross-checks for this capital-intensive business.
Relative to the Industrials/Waste Management sector, CLH's 32.08x trailing PE and 13.33x EV/EBITDA represent a premium to the broader industrial average, which typically trades in the high-teens to low-20s PE range — implying a premium of roughly 40-60% depending on the peer set. That premium is defensible on competitive grounds: CLH's incinerator network is effectively irreplaceable, its 14.24% ROE and 11.17% operating margin exceed typical waste-hauler levels, and its 11.95% revenue growth outpaces the low-to-mid single-digit growth of mature peers. However, the 2.07x PS ratio and 4.54x P/B ratio are less demanding than the PE suggests, and the 29.51% gross margin is mid-range for the industry, so the valuation is best characterized as a quality premium rather than an extreme outlier.
On its own history, CLH's valuation sits in the upper-middle of its multi-year band. The trailing PE of 32.08x compares with 23.19x in Q2 2026's historical ratio snapshot, 35.96x at year-end 2025, 26.15x in Q3 2025, and a low of 8.03x in Q2 2022, while the PS ratio of 2.07x is well below the 8.0-10.4x range recorded in the historical ratios table (which appears to use a different share-count basis). The P/B of 4.54x is near the middle of its 3.21x-5.46x range over the past four years. The takeaway is that the market is pricing in continued earnings execution and margin recovery but is not at a historical extreme, leaving room for multiple expansion if Safety-Kleen margins normalize and free cash flow turns positive in the second half.
PE
32.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 8x~45x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on cash generation and leverage. First-half 2026 free cash flow was deeply negative at -$244.2 million combined (Q1 -$92.3 million, Q2 -$151.9 million), driven by a $225.8 million acquisition, $126.0 million of Q2 capex, and a $157.5 million working capital build, while cash fell to $103.1 million from $826.3 million at year-end 2025. Debt-to-equity of 1.256 and total debt to capitalization of 50.9% mean that a prolonged cash burn would require external financing at potentially higher rates. Gross margin compression to 27.87% from 33.32% a year ago adds earnings volatility, and the business carries revenue concentration in Environmental Services, which generates the majority of sales, making the Safety-Kleen margin recovery essential to the blended profitability story.
Market and competitive risks include valuation compression and sector rotation. At 32.08x trailing PE and 13.33x EV/EBITDA, CLH trades at a roughly 40-60% premium to the broader industrial average, leaving the stock vulnerable to multiple contraction if growth decelerates or if investors rotate toward cheaper cyclicals. The beta of 0.875 provides some downside cushion, but relative strength versus SPY has already turned negative over one-month (-0.88) and six-month (-1.04) windows, suggesting leadership is fading. Competitive threats are moderated by the irreplaceable incinerator network, but volatile base oil spreads in the Safety-Kleen re-refining business remain a structural earnings swing factor, and regulatory changes in hazardous waste handling could raise compliance costs.
A worst-case scenario would combine a Safety-Kleen margin relapse with continued negative free cash flow and a broad industrial de-rating. In that chain, Q3 earnings would miss, analysts would cut targets toward the $325 low, and the stock could retest its spring support around $276-$280, a decline of roughly 12-13% from the current $320.06. A deeper breakdown below that floor would put the 52-week low of $201.34 in play, representing a -37% drawdown from current levels, consistent with the stock's historical maximum drawdown of -18.06% being exceeded in a stress scenario. Investors should size positions recognizing that a realistic adverse outcome is a -13% to -37% range depending on whether the selloff is a normal consolidation or a thesis-breaking event.
FAQ
The most severe risk is financial: first-half 2026 free cash flow was -$244.2 million combined, and with debt-to-equity at 1.256 and cash down to $103.1 million from $826.3 million, sustained negative FCF would force external financing. Second is margin risk: gross margin fell to 27.87% from 33.32% a year ago, and further compression would threaten the operating leverage story. Third is valuation risk: the 32.08x trailing PE embeds a premium that could compress toward the low-20s in an industrial de-rating, and relative strength versus SPY has already turned negative over one-month (-0.88) and six-month (-1.04) windows. Fourth is company-specific risk in Safety-Kleen, where volatile base oil spreads could drive a segment margin relapse and earnings miss.
The 12-month forecast has three scenarios: a base case with 55% probability targeting $325-$361, assuming high-single-digit revenue growth, operating margins near 15%, and modestly positive second-half free cash flow; a bull case with 25% probability targeting $361-$390, driven by Safety-Kleen margin normalization and positive FCF; and a bear case with 20% probability targeting $201-$280, driven by a margin relapse and multiple compression. The base case is most likely, anchored by the analyst average target of $361.00 and the lowest target of $325.00, with the key assumption being that free cash flow turns positive in the second half as capex normalizes.
CLH trades at a trailing PE of 32.08x and a forward PE of 31.56x, a roughly 40-60% premium to the broader industrial average in the high-teens to low-20s PE range. On its own history, the PE sits in the upper-middle of its multi-year band, well below the 35.96x at year-end 2025 but above the 23.19x historical snapshot, so it is not at an extreme. The 2.07x PS ratio and 4.54x P/B are less demanding than the PE suggests, and the 13.33x EV/EBITDA is reasonable for a capital-intensive business with a moat. The market is paying a quality premium that implies continued earnings execution and Safety-Kleen margin recovery; relative to that expectation, the stock is fairly valued to modestly undervalued given the +12.8% upside to the average target.
From a risk/reward perspective, CLH offers a favorable setup: the average analyst target of $361.00 implies +12.8% upside, and even the lowest target of $325.00 is above the current $320.06, meaning the entire 15-analyst cohort sees the stock as undervalued. The biggest downside risk is a retest of the $276-$280 spring support, roughly -13%, or in a severe scenario the 52-week low of $201.34, about -37%. With a beta of 0.875 and a 14.24% ROE, the stock offers quality exposure with below-market volatility. It is a good buy for long-term investors who can tolerate near-term free cash flow volatility and a premium 32.08x PE, particularly on pullbacks toward the $300-$310 zone.
CLH is best suited for long-term holding of at least 12-24 months. The company pays no dividend (payout ratio of 0), so returns depend entirely on capital appreciation, and the beta of 0.875 means volatility is below market but still meaningful. Earnings visibility is moderate: revenue has grown consistently, but free cash flow is lumpy due to acquisition and capex cycles, and the premium 32.08x PE requires time for earnings to grow into the multiple. Short-term traders could play the well-defined $276-$280 support and $335.94 resistance range, but the primary thesis is a multi-year compounding story in a moat-protected franchise, making a minimum 12-month holding period appropriate.