Wunderlich Securities Maintain Buy Rating, $21 Target On Covanta Holding (CVA)

Wunderlich Securities is out with a research report this morning and in it, Wunderlich is keeping its Buy rating and $21 price target on Covanta Holding CVA after the company reported earnings yesterday. Wunderlich writes, "We maintain our Buy rating and $21 target on Covanta (CVA) shares. It is not unreasonable for the market to be perplexed how CVA, with such a significant proportion of its revenues under long-dated contracts, appears to have as little period-to-period visibility on the business model. While CVA believes it met its own expectations, it clearly does not articulate those goals to the market since it keeps missing consensus forecasts. This brings into question if the CVA business model is predictable. If it is not, then the valuation will reflect that lack of predictability. We suggest investors focus on the FCF available to shareholders and that they should conclude the stock is undervalued." Shares of Covanta are trading at $15.21, down 18 cents in trading so far.