Group 1 - Waste Connections has filed a lawsuit against Haulla, alleging theft of confidential customer information and encouraging customers to breach contracts with Waste Connections [3][5] - The lawsuit claims Haulla accessed Waste Connections' customer portal illegally, created over 2,500 fake customer profiles, and impersonated customers to obtain sensitive pricing and service details [3][4] - Waste Connections asserts that Haulla's actions have damaged customer relationships and negatively impacted business operations [5] Group 2 - Haulla, operating under Ecube Labs, has filed for Chapter 11 bankruptcy and is involved in a separate lawsuit initiated by Waste Connections in March 2024 [6] - A Texas bankruptcy court has approved Haulla's request to borrow up to $1.5 million from its parent company to sustain operations, with an immediate borrowing of $500,000 [6] - Waste Connections has updated its complaint to include allegations against Ecube Labs Ltd., claiming it conspired with Haulla in the fraudulent activities [6]

Core Viewpoint - UBS has increased its price target for Waste Connections, Inc. from $190 to $195, maintaining a "Neutral" rating, citing steady execution and resilient fundamentals following Q3 results [1] Financial Performance - Waste Connections reported Q3 2025 revenue of $2.46 billion, up from $2.34 billion year-over-year, indicating growth [3] - Adjusted EBITDA for the same period rose to $830.3 million, aligning with the company's 2025 guidance, reflecting consistency and disciplined cost management [3] Future Outlook - UBS has adjusted its annual adjusted EBITDA forecasts for Waste Connections to $3.12 billion, $3.36 billion, and $3.70 billion for 2025, 2026, and 2027 respectively, attributing the upward revision to the company's strong performance and potential M&A activity due to pressures on smaller operators [2]

Core Insights - Shifting economics are impacting landfill gas to renewable natural gas (RNG) projects, with waste companies adjusting their RNG portfolios based on D3 RIN prices [2] - RIN prices have decreased by approximately one dollar in October compared to the previous year, leading to Jefferies lowering its long-term credit expectation from $2.50 to $2.20 [3] - Waste Connections is facing "cost creep and delays" in its RNG projects, prompting a delay in planned capital spending [4] Company-Specific Insights - Waste Connections had previously expected a 1-1 ratio between investment and earnings from RNG projects, but this has shifted to a potential 2-1 ratio due to current RIN prices around $2.25 [5] - WM plans to delay the sale of some RINs to the fourth quarter to capitalize on potential price increases [6] - Republic Services may pivot towards using landfill gas for electricity generation instead of RNG to meet rising energy demands from data centers [6] Industry Trends - Analysts attribute the decline in RIN prices to the EPA's conservative proposals regarding future credit volumes, which raises concerns about long-term demand for renewable natural gas in transportation [7] - Despite current RIN prices, waste companies can still achieve returns on their RNG investments, but may consider alternative outlets or revert to landfill gas-to-electricity projects if prices remain low [8]

Core Insights - The article highlights the author's extensive experience in financial analysis across various sectors, emphasizing expertise in market analysis, valuation models, and investment strategy [1]. Group 1: Experience and Background - The author has over 13 years of diverse financial analysis experience, particularly in the Auto, Industrials, and IT sectors [1]. - Previous roles include working in treasury for Ford and Caterpillar, as well as managing investor relations and strategic finance for a listed IT company with a market cap of approximately USD 2.5 billion [1]. - The author's background also includes experience as an equity research analyst, which has contributed to a strong understanding of business growth drivers [1].

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [3] - The Growth Score evaluates a company's financial health and future outlook through projected earnings and sales [4] - The Momentum Score identifies stocks with upward or downward trends using price changes and earnings estimate changes [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for stock selection [6] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, with 1 (Strong Buy) stocks achieving an average annual return of +23.81% since 1988, outperforming the S&P 500 [7] - There are typically over 800 stocks rated 1 or 2, making it essential to utilize Style Scores for effective selection [8] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for maximizing return potential [9] Stock Highlight: Waste Connections (WCN) - Waste Connections is an integrated solid waste services company operating in the U.S. and Canada, providing waste collection, disposal, and recycling services [11] - WCN holds a 3 (Hold) Zacks Rank with a VGM Score of B and a Momentum Style Score of A, having increased by 2.6% over the past four weeks [12] - Analysts have revised WCN's earnings estimate upwards, with the Zacks Consensus Estimate rising by $0.05 to $5.15 per share, and an average earnings surprise of +2.5% [12][13]

Core Insights - Waste Connections, Inc. (WCN) reported strong third-quarter 2025 results, with earnings and revenues exceeding Zacks Consensus Estimates [1][9] - Despite the earnings beat, the stock price has not shown significant movement since the results were released on October 21 [1] Financial Performance - Adjusted earnings were $1.44 per share, surpassing the Zacks Consensus Estimate by 4.4% and increasing 6.7% year-over-year [2] - Revenues reached $2.5 billion, slightly beating consensus estimates and growing 5.1% from the previous year [2] - Adjusted EBITDA was $787.4 million, down 5.4% from the year-ago quarter, with an adjusted EBITDA margin of 33.7%, a decrease of 10 basis points year-over-year [5][9] Segment Performance - Solid Waste Collection segment revenues grew 6.6% year-over-year to $1.7 billion, meeting estimates [3] - Solid Waste Disposal and Transfer segment revenues increased to $456.4 million, surpassing projections [3] - Solid Waste Recycling segment revenues fell 16.2% year-over-year to $56.2 million, missing estimates [4] - E&P Waste Treatment, Recovery and Disposal segment revenues rose 21.6% year-over-year to $179.1 million, exceeding estimates [4] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q3 2025 were $117.6 million, up from $110.2 million in the previous quarter [6] - Long-term debt increased to $8.6 billion from $8.3 billion in the prior quarter [6] - Generated $677.4 million in cash from operating activities, with adjusted free cash flow of $384.6 million [7] Outlook - For FY25, the company expects revenues of $9.45 billion, slightly below the Zacks Consensus Estimate of $9.46 billion [8] - Anticipated adjusted EBITDA for FY25 is $3.12 billion, representing nearly 33% of total revenues [8]

Core Viewpoint - The analysis presents a neutral stance on Waste Connections, Inc. (NYSE: WCN) (TSX: WCN:CA), highlighting strengths in pricing but noting challenges such as volume softness, commodity price headwinds, and ongoing regulatory and litigation risks [1]. Summary by Relevant Categories Company Performance - Waste Connections, Inc. exhibits good pricing strength, which is a positive aspect of its performance [1]. Market Challenges - The company faces volume softness, which may impact overall growth [1]. - There are commodity price headwinds that could affect profitability [1]. - Ongoing regulatory and litigation risks are present, potentially posing challenges to the company's operations [1].

Core Viewpoint - The analysis presents a neutral stance on Waste Connections, Inc. (NYSE: WCN) (TSX: WCN:CA), highlighting strengths in pricing but noting challenges such as volume softness, commodity price headwinds, and ongoing regulatory and litigation risks [1]. Summary by Relevant Categories Company Performance - Waste Connections, Inc. exhibits good pricing strength, which is a positive indicator for its financial health [1]. Market Challenges - The company faces volume softness, which may impact overall revenue generation [1]. - There are commodity price headwinds that could affect profitability [1]. - Ongoing regulatory and litigation risks present additional challenges for the company [1].

Core Insights - Waste Connections reported $2.46 billion in revenue for Q3 2025, a year-over-year increase of 5.1% and an EPS of $1.44, up from $1.35 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Revenue Performance - Total revenue of $2.46 billion compared to Zacks Consensus Estimate of $2.45 billion, resulting in a surprise of +0.37% [1] - EPS of $1.44 compared to consensus estimate of $1.38, delivering a surprise of +4.35% [1] Geographic Revenue Breakdown - Canada: $349.77 million, exceeding the estimate of $339.42 million, a +2.3% change year-over-year [4] - Southern: $485.39 million, slightly below the estimate of $491.45 million, a +7.1% change year-over-year [4] - Central: $413.39 million, above the estimate of $409.56 million, a +5.5% change year-over-year [4] - Eastern: $440.77 million, slightly below the estimate of $441.88 million, an +8.1% change year-over-year [4] Revenue Breakdown by Segment - E&P Waste Treatment, Recovery and Disposal: $179.14 million, exceeding the estimate of $165.78 million, a +21.6% change year-over-year [4] - Intermodal and Other: $41.99 million, below the estimate of $47.43 million, a -10.4% change year-over-year [4] - Solid Waste Recycling: $56.24 million, below the estimate of $61.58 million, a -16.2% change year-over-year [4] - Solid Waste Collection: $1.72 billion, slightly below the estimate of $1.73 billion, a +6.6% change year-over-year [4] - Revenues from Intercompany: -$366.12 million, worse than the estimate of -$350.34 million, a +10.3% change year-over-year [4] - Total collection revenues: $1.73 billion, slightly above the estimate of $1.72 billion, a +6.7% change year-over-year [4] - Recycling revenues: $58.35 million, below the estimate of $71 million, a -16.3% change year-over-year [4] - E&P revenues: $188.68 million, exceeding the estimate of $165.31 million, a +22.4% change year-over-year [4] Stock Performance - Shares of Waste Connections returned +1% over the past month, compared to the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $2.458 billion, an increase of $120 million or 5.1% year over year, exceeding expectations [15][20] - Adjusted EBITDA for Q3 was $830.3 million, up 5.4% year over year, with an adjusted EBITDA margin of 33.8%, reflecting a 10 basis point increase year over year [19][20] - Core pricing increased by 6.3% in Q3, leading to an expected full-year core pricing of approximately 6.5% [15][20] Business Line Data and Key Metrics Changes - Roll-off pulls were down 1% year over year, while rates per pull increased by 2% [17] - Landfill tons increased by almost 3%, with municipal solid waste (MSW) tons up 2% and special waste tons up 10% [17] - E&P waste revenues increased by 7% year over year, driven by the production-oriented R360 Canada business [18] Market Data and Key Metrics Changes - Volumes were down 2.7%, reflecting a purposeful shedding of low-margin contracts and sluggishness in cyclically exposed activities [15][20] - The southern region continued to experience mid-single-digit declines, while markets like Florida and Texas showed less negative trends compared to previous quarters [17] Company Strategy and Development Direction - The company is focused on acquisition activity, with approximately $300 million in annualized revenues either closed or under definitive agreement year to date [10] - An 11.1% increase in the regular quarterly cash dividend was authorized, marking the 15th consecutive annual double-digit increase since 2010 [10] - Long-term investments in technology and infrastructure are being made to enhance productivity and efficiency, with a focus on data analytics and customer experience [14][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering the full-year 2025 outlook, assuming no further headwinds [4][20] - For 2026, the company anticipates mid-single-digit revenue growth driven by price-led organic growth in solid waste, with adjusted EBITDA margin expansion expected [21][22] - The company is optimistic about the benefits of higher employee retention and engagement, which have positively impacted financial results [12][13] Other Important Information - The company has achieved significant progress in sustainability targets, including a 19% reduction in emissions and improved safety metrics [11][12] - The Chiquita Canyon landfill closure is being managed effectively, with ongoing remediation efforts showing positive results [46][48] Q&A Session Summary Question: Can you discuss the performance of the E&P business in Q3 and its outlook? - Management noted strong performance in the production-oriented segment, with a sequential increase in the Canadian business due to a remediation job, suggesting a run rate adjustment of $10 million for future projections [27] Question: What is the expected impact of RNG investments on EBITDA? - Management indicated that there would be no material incremental RNG revenue or EBITDA in 2025, with benefits expected to materialize more significantly in 2027 [28] Question: How do you view the pricing strategy for 2026? - The company expects to need less price increase in 2026 compared to 2025, with a target price-cost spread of 150 to 200 basis points [40][42] Question: What are the expectations for free cash flow in 2026? - Management highlighted that the timing of capital expenditures and green CapEx will inform free cash flow expectations, with a potential $50 million benefit from lower green CapEx [43] Question: Can you provide an update on the Chiquita Canyon remediation obligations? - Progress is being made in the remediation efforts, with a reduction in leachate handling and a significant decrease in odor complaints, although outlays are running ahead of expectations [46][48] Question: What is the outlook for volumes heading into next year? - Management indicated that while volumes have been flattish, there are signs of improvement, and the company is not expecting significant contract expirations that would impact volumes negatively [51][76]