Earnings Forecast: Wunderlich Reiterates Buy Rating on Republic Services (RSG)

Wunderlich Securities maintains a Buy rating on Republic Services Inc. RSG Wednesday, noting that "While weather, fuel and paper prices will create some noise in 1Q11, we believe that industry fundamentals should continue to show incremental improvements." Republic Services is a provider of services in the domestic non-hazardous solid waste industry. The company provides non-hazardous solid waste collection services for commercial, industrial, municipal and residential customers through 348 collection companies in 40 states and Puerto Rico. RSG will report earnings after the market close on April 28 with a conference call at 5:00 p.m. EDT. Wunderlich holds a $37 price target on the stock. Wunderlich Director of Research Michael E. Hoffman comments: "Clearly there is more operating leverage from price than volume. A tie goes to price when choosing which component of internal growth RSG would prefer. In 1Q11, RSG's model on price should be similar to 4Q10 and volume (excluding weather impact) should again be less negative. Beyond 1Q11, we expect 1H11 organic growth to be materially less than 2H11 and believe the repurchase authorization could be increased sooner rather than later." Consensus forecasts 1Q11 sales to grow 1.4% year-to-year to $1.98 billion and EBITDA is forecasted at $607 million.