WCN Should I Buy
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Waste Connections Inc (WCN) is not a strong buy for a beginner, long-term investor at this moment. While the company has positive long-term growth prospects and strong analyst support, the recent financial performance shows a decline in net income and EPS, and hedge funds are selling heavily. Additionally, technical indicators suggest a mixed trend with bearish moving averages and overbought RSI levels. It would be prudent to wait for a better entry point or clearer signals of upward momentum.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI at 75.53 suggests the stock is nearing overbought territory. The moving averages are bearish (SMA_200 > SMA_20 > SMA_5), and the stock is trading near resistance levels (R1: 167.844, R2: 171.401). Overall, the technical indicators present a mixed picture.
Analysts have raised price targets and maintained positive ratings, citing strong Q1 results and optimistic guidance for
Management plans to close deals with $100 million in annualized revenue and repurchase 1% of outstanding shares.
Investments in AI and special waste processing are expected to drive future growth.
Hedge funds are selling heavily, with a 702.62% increase in selling activity last quarter.
Net income and EPS have declined YoY in Q1 2026, raising concerns about profitability.
Rising fuel costs and weather impacts pose challenges to margins.
In Q1 2026, revenue increased by 6.39% YoY to $2.371 billion, and gross margin improved by 0.96% YoY to 29.31%. However, net income dropped by 9.18% YoY to $219.34 million, and EPS fell by 7.53% YoY to $0.86. This mixed performance highlights growth in revenue but declining profitability.
Analysts are broadly positive on WCN, with multiple firms raising price targets recently. RBC Capital raised the target to $218, JPMorgan to $210, and Goldman Sachs to $211, all maintaining Outperform or Buy ratings. Analysts cite strong Q1 results, improving pricing strategies, and potential upside to 2026 guidance as key drivers.
