Wunderlich Securities Reiterates Republic Services Buy, $37 PT (RSG)

Wunderlich Securities reiterated its Republic Services RSG Buy rating and $37 price target in a research report published today. In the report, Wunderlich Securities states, "For RSG 2011 price and core volume are positive on a same-store basis at 2%; add 1% for surcharges and commodities to get to 3%. This produces margin expansion and 5% long-term growth in FCF. Over the next two years bonus depreciation pulls forward ~$175mm in FCF and then unwinds over three to four years. RSG will return $700mm to shareholders, leaving $200mm for acquisition growth; none of which is part of RSG guidance now or in the future. Any strength in volume given the recurring annual margin gains, lower interest costs, and elimination of the legacy tax liabilities, provides additional upside to FCF." Shares of Republic Services were at $29.41 in pre-market trading at the time of posting, down 3.29% from Thursday's market close.