Republic Services
RSG
$233.40
-0.96%
Republic Services is the second-largest integrated waste management company in North America, operating 208 active landfills, 248 transfer stations, and 75 recycling centers across residential, commercial, industrial, and environmental solutions end markets, with roughly 89% of revenue from core recycling and waste collection and 11% from its higher-growth Environmental Solutions segment. Its vertically integrated landfill-to-transfer-station network and dense route density create meaningful local-scale moats and pricing power that distinguish it from smaller haulers and position it as a defensive, cash-generative compounder rather than a disruptor. The current investor debate centers on whether steady margin expansion and dividend growth can offset persistent volume declines in collection, with recent coverage framing the stock as a hold on soft volumes despite reliable pricing and cost discipline. A secondary narrative is capital allocation intensity — roughly $1 billion of planned acquisitions plus elevated capex are pressuring free cash flow, even as the company leans on pricing and Environmental Solutions to sustain mid-single-digit revenue growth.…
RSG
Republic Services
$233.40
Related headlines
RSG 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Republic Services's 12-month outlook, with a consensus price target around $243.58 and implied upside of +4.4% versus the current price.
Average Target
$243.58
0 analysts
Implied Upside
+4.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$208 - $272
Analyst target range
Coverage is broad, with 24 analysts and a consensus recommendation of "buy" (mean rating 2.0 on a scale where lower is more bullish), and an average target price of $243.58, which implies just +1.3% upside from the current $240.45 — essentially fair value after the recent 12.8% monthly rally. The consensus leans moderately bullish on fundamentals but has been overtaken by price action, and the institutional ratings flow is mixed-to-cautious: recent actions include Neutral reiterations from UBS (August 11) and Barclays (August 7), a Buy from Citigroup (July 10), an Outperform from RBC (May 8), and a notable downgrade from Argus Research to Hold from Buy on May 11. The pattern suggests analysts are comfortable with the quality of the franchise but see limited near-term upside at current levels. The target range of $208 to $272 is wide — roughly 31% from low to high — signaling meaningful dispersion in assumptions: the $272 high target likely assumes multiple expansion and accelerating Environmental Solutions growth plus continued margin gains, while the $208 low target implies margin compression, volume deterioration, or a de-rating toward the low end of the historical PE band. Consensus EPS estimates of $10.46 (range $10.27–$10.63) and revenue estimates of $20.89 billion (range $20.60–$21.16 billion) are tightly clustered, indicating high confidence in near-term fundamentals even as price targets diverge. The key takeaway is that the stock has rallied to within a whisker of the average target, so further upside now depends on estimate revisions or a catalyst rather than multiple expansion alone.
Bulls vs Bears: RSG Investment Factors
The bear case is narrowly stronger on near-term math: with the stock at $240.45 against a $243.58 average target (+1.3% upside), a 30.9x PE and a 5.58 PEG, the market has already paid for the quality story, and the recent 12.8% monthly surge on modest 1.88 million share volume looks stretched for a 0.397-beta name. The bull case is stronger on franchise quality: 5.1% FCF yield, operating margin improving to 20.34%, a 34.5% payout ratio and a landfill network that generates pricing power are durable advantages that justify a premium. The single most important tension is whether pricing-led margin expansion can outrun volume declines and acquisition-driven FCF dilution — if organic volume stabilizes or Environmental Solutions accelerates, the premium is earned; if volumes keep eroding while capex and M&A absorb cash, the multiple compresses toward the low end of its historical band.
Bullish
- Defensive low-beta cash compounder: Beta of 0.397 means RSG moves roughly 60% less than SPY, and TTM free cash flow of $3.404 billion on a $66.1 billion market cap yields about 5.1%. That combination of low volatility and high cash conversion is rare in Industrials and supports larger position sizing for risk-budgeted portfolios.
- Margin expansion is real and sustained: Operating margin rose from 19.52% in Q4 2025 to 20.34% in Q2 2026, while gross margin held in a tight 41.5%-42.2% band across four quarters. Net income climbed from $495 million in Q1 2025 to $566 million in Q2 2026, showing pricing and cost discipline are translating into earnings growth despite soft volumes.
- Pricing power from vertically integrated moat: With 208 active landfills, 248 transfer stations and 75 recycling centers, RSG controls the disposal endpoint that smaller haulers depend on. Collection revenue of $2.993 billion out of $4.43 billion total is growing on price rather than volume, which is exactly the mix that protects margins in a low-growth economy.
- Momentum breakout with relative strength: RSG is up 12.83% in one month and 10.85% in three months versus SPY's -1.02% and +2.85%, a relative strength gap of +13.85 and +8.00 points respectively. At $240.45 it sits at roughly 94% of its 52-week range, and a close above the $243.22 high would likely invite trend-following flows.
Bearish
- Valuation leaves no margin for error: At 30.89x trailing and 29.79x forward earnings with a PEG of 5.58, RSG trades at a clear premium to the Industrials sector, and its 15.67x EV/EBITDA is rich for a mid-single-digit grower. The current PE sits in the middle-to-upper portion of its historical 23.4x-38.3x band, so multiple compression is a live risk if growth slows.
- Analyst upside has been exhausted: The $243.58 average target implies only +1.3% upside from $240.45 after the 12.8% monthly rally, and the consensus is already 'buy' with a mean rating of 2.0 across 24 analysts. With the stock essentially at fair value by consensus, further gains require estimate revisions or a catalyst rather than re-rating.
- Free cash flow pressured by acquisition strategy: Q2 2026 operating cash flow of $2.38 billion had to fund $868 million of capex plus $865 million of acquisitions, leaving little slack. The roughly $1 billion acquisition plan and elevated capex are the explicit reason Investing.com framed the story as 'acquisitions against free cash flow headwinds.'
- Thin liquidity and leverage cushion: A current ratio of 0.64 and debt-to-equity of 1.15 mean RSG depends on debt markets and internal cash to fund growth, with interest coverage of roughly 5.97x offering limited cushion. ROA of just 6.17% underscores how capital-intensive the landfill and fleet base is, and ROE of 17.87% is flattered by an equity multiplier near 2.9x.
RSG Technical Analysis
RSG is in a sustained uptrend that has recently accelerated into a breakout: the stock is up 7.77% over the past year and 14.39% year-to-date, and at $240.45 it trades at approximately 94% of its 52-week range (low $196.41, high $243.22), just below the upper bound. That positioning signals strong momentum and a market willing to pay up for defensive quality, though proximity to the high also raises the risk of short-term overextension and profit-taking. The 14.87% max drawdown over the period shows the trend has not been linear, with a meaningful mid-year correction before the current advance. Short-term momentum is clearly accelerating and diverging positively from the longer-term trend: the stock is up 12.83% over one month and 10.85% over three months, versus just 7.77% over twelve months, meaning most of the annual gain has been earned in the last quarter. Relative strength confirms the move is stock-specific rather than market-driven — RSG has outperformed SPY by 13.85 percentage points over one month and 8.00 points over three months, even as its one-year relative strength remains negative at -5.36 points, implying the stock is playing catch-up after a period of underperformance. The recent surge from roughly $207 on October 1 to $240.45 on October 23 occurred on modest volume of about 1.88 million shares, which is a caution flag for the durability of the breakout. Key resistance sits at the 52-week high of $243.22, and a decisive close above that level would confirm a fresh leg higher and likely invite momentum and trend-following flows; support is anchored at the 52-week low of $196.41, with the $207–$210 area acting as nearer-term support given the October base. A breakdown below $196.41 would invalidate the uptrend and signal a broader reversal. Volatility is unusually low for an equity: beta of 0.397 implies roughly 60% less volatility than SPY, which supports larger position sizing for risk-budgeted portfolios but also means the recent 12.8% monthly move is statistically outsized for this name and warrants caution about mean reversion.
Beta
0.40
0.40x market volatility
Max Drawdown
-14.9%
Largest decline past year
52-Week Range
$196-$243
Price range past year
Annual Return
+7.2%
Cumulative gain past year
| Period | RSG Return | S&P 500 |
|---|---|---|
| 1m | +9.6% | +0.9% |
| 3m | +10.4% | +4.1% |
| 6m | +13.0% | +7.2% |
| 1y | +7.2% | +12.4% |
| ytd | +11.0% | +13.3% |
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RSG Fundamental Analysis
Revenue is growing steadily but at a modest pace: Q2 2026 revenue of $4.43 billion rose 4.6% year-over-year from $4.235 billion in Q2 2025, extending a consistent mid-single-digit trajectory ($4.009B in Q1 2025 to $4.113B in Q1 2026, and $4.046B to $4.135B in the Q4 comparison). The segment mix shows collection is the dominant driver at $2.993 billion, followed by landfill at $517 million, Environmental Solutions at $458 million, and transfer and other at $231 million each, meaning growth is heavily levered to collection pricing rather than volume, consistent with the reported volume softness. The multi-quarter trend shows revenue growth is stable rather than accelerating, which caps operating leverage and explains why the investment case rests on pricing and margin discipline rather than top-line reacceleration. Profitability is solid and improving: Q2 2026 net income was $566 million on a 12.78% net margin, with gross margin of 42.14% and operating margin of 20.34%, and net income has grown from $495 million in Q1 2025 to $525 million in Q1 2026 and $566 million in Q2 2026. Gross margin has held in the 41.5%–42.2% band over the last four quarters, while operating margin ticked up from 19.52% in Q4 2025 to 20.34% in Q2 2026, indicating modest but real operating leverage from cost controls and pricing. At a 12.8% net margin, RSG sits at the higher end of what is typical for large-cap waste and environmental services, reflecting its landfill ownership and route density advantages. Balance sheet and cash flow are adequate but not fortress-like: debt-to-equity is 1.15, the current ratio is a thin 0.64, and interest coverage of roughly 5.97x leaves limited cushion, while TTM free cash flow of $3.404 billion against a $66.1 billion market cap implies an FCF yield of about 5.1%. Cash generation is healthy — Q2 2026 operating cash flow of $2.38 billion funded $868 million of capex and $865 million of acquisitions, with $385 million returned via dividends and $659 million via buybacks — but the company is clearly dependent on debt markets and internal cash to fund its acquisition-led growth strategy. ROE of 17.87% is respectable but flattered by leverage (equity multiplier near 2.9x), and ROA of just 6.17% underscores the capital intensity of the landfill and fleet base.
Quarterly Revenue
$4.4B
2026-06
Revenue YoY Growth
+4.6%
YoY Comparison
Gross Margin
42.1%
Latest Quarter
Free Cash Flow
$3.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RSG Overvalued?
Because RSG is solidly profitable (Q2 2026 net income of $566 million), the PE ratio is the appropriate primary metric: the stock trades at 30.89x trailing earnings and 29.79x forward earnings, a modest 3.6% compression that implies the market expects only modest earnings growth rather than a re-rating. The PEG ratio of 5.58 is the more revealing figure — it signals that investors are paying a very high multiple relative to the company's growth rate, consistent with a premium-quality defensive compounder rather than a growth story. Against the broader Industrials sector, RSG's 30.9x trailing PE and 5.20x EV/Sales represent a clear premium, justified in part by its 42.0% gross margin, 20.0% operating margin, and 12.9% net margin, which exceed typical industrial-sector profitability, but the 15.67x EV/EBITDA multiple leaves little room for execution error. On price-to-book, RSG at 5.52x is expensive versus asset-heavy industrial peers, reflecting the market's capitalization of its landfill permits and route networks as intangible moats rather than balance-sheet assets. Historically, RSG's PE has ranged from roughly 23.4x (Q3 2023) to 38.3x (Q1 2025), and the current 30.9x sits in the middle-to-upper portion of that band, while the PS ratio of 3.98x on the current data compares with historical quarterly PS readings in the 11.8x–18.9x range on a different share-count basis, so the more reliable signal is the PE: the stock is not at a historical extreme but is priced for continued steady execution. The dividend yield of 1.12% with a 34.5% payout ratio is modest but well covered, reinforcing the income-plus-quality framing rather than deep value.
PE
30.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 23x~38x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on cash flow strain and balance-sheet thinness. Q2 2026 operating cash flow of $2.38 billion was consumed by $868 million of capex and $865 million of acquisitions, and roughly $1 billion of planned deals plus elevated capex will keep free cash flow under pressure relative to the $3.404 billion TTM figure. A current ratio of 0.64 and debt-to-equity of 1.15 mean the company leans on debt markets, while interest coverage of about 5.97x (Q2 interest expense of $151 million against $901 million operating income) leaves limited room if rates stay elevated. Revenue concentration in collection ($2.993 billion of $4.43 billion) ties the model to pricing on a volume base that is already declining, and ROA of 6.17% shows how much capital the landfill and fleet base absorbs.
Market and competitive risks are primarily valuation and rotation. At 30.89x trailing and 29.79x forward earnings with a 5.58 PEG and 15.67x EV/EBITDA, RSG trades at a premium to Industrials peers, and its historical PE band of 23.4x-38.3x means a de-rating to the midpoint-low end could erase a meaningful chunk of the recent rally. The stock's 0.397 beta cuts both ways: it cushions macro shocks but also means the 12.83% one-month move is statistically outsized and vulnerable to mean reversion, especially since the breakout came on modest 1.88 million share volume. Competitive dynamics include larger rival Waste Management and smaller regional haulers competing on price in dense routes, while the Argus downgrade to Hold and Neutral reiterations from UBS and Barclays signal that sell-side conviction is thinning at current levels.
A worst-case scenario would combine volume deterioration, margin compression and multiple de-rating: if collection volumes keep falling, acquisition integration disappoints and FCF stays suppressed, the stock could retrace to the $208 analyst low target, about -13.5% from $240.45, and in a broader risk-off move to the $196.41 52-week low, roughly -18.3%. The 14.87% max drawdown over the past year shows this magnitude of correction is entirely realistic within a single cycle, and a break below $196.41 would invalidate the uptrend and signal a broader reversal. Investors should size positions knowing a -13% to -18% drawdown is the plausible adverse outcome, not a tail event.