Moody's Ratings Affirms Casella's Ba2 Cfr

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Top Business Services Stocks to Watch According to Jefferies

Investing.com

RBC Bearings

-2.40%

Casella Waste Systems

-2.34%

Netflix

+0.40%

Advanced Micro Devices

-6.13%

Meta Platforms

-2.95%

Investing.com -- The business services sector presents compelling investment opportunities as companies focus on operational improvements and margin expansion.

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Jefferies has identified two standout performers in this space that warrant investor attention due to their strong growth prospects and operational enhancements.

Casella Waste Systems (NASDAQ:CWST) and Rollins (NYSE:ROL) have emerged as Jefferies’ top picks in the business services sector, with both companies demonstrating potential for significant upside through different strategic initiatives.

1. Casella Waste Systems (CWST): Jefferies highlights several improvement areas that should drive growth, including fleet upgrades, labor optimization, and system/technology integration.

These enhancements are expected to unlock synergies, pricing power, and margin expansion. The company is targeting $5 million in synergies from fleet upgrade and automation benefits alone.

Analysts at Jefferies see potential for at least another $5 million (approximately 20 basis points) in upside from systems/technology transition and pricing opportunities.

Jefferies has upgraded Casella Waste Systems to a Buy rating, citing an attractive setup for 2026 as the company’s valuation has reset to 31x price-to-free cash flow compared to its historical average of 38x. The firm believes that Mid-Atlantic integration issues, which previously created headwinds, are now poised to become tailwinds for the company.

In recent developments, Casella Waste Systems has seen varied analyst actions, with Stifel reiterating a Buy rating and JPMorgan initiating coverage with a Neutral rating. The company also appointed Edmond R. ’Ned’ Coletta as its new Chief Executive Officer.

2. Rollins (ROL): Jefferies reiterates a Buy rating on Rollins, describing it as their "best in class" diversified services compounder. The company continues to deliver organic growth above pre-COVID levels through increased sales hiring, disciplined pricing, expanded commercial reach, and a diversified customer acquisition strategy.

EBITDA margins are expected to exceed historical norms, with Jefferies projecting 25% as attainable compared to 22% in 2022. The firm views Rollins’ premium multiple as justified given its consistent high-single-digit organic growth, expanding margins, and robust balance sheet flexibility.

Rollins was recently upgraded to Overweight by Morgan Stanley, while both UBS and RBC Capital also raised their price targets on the company’s stock. Additionally, Rollins announced that its Board of Directors declared a regular quarterly cash dividend of $0.1825 per share.

Both companies represent different aspects of value within the business services sector, with Casella focusing on operational improvements and integration benefits, while Rollins continues to execute on its organic growth strategy with disciplined pricing and margin expansion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Casella Waste Systems, Inc. To Host Conference Call On Its Fourth Quarter 2025 Results

Reuters

Casella Waste Systems

-2.34%

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Waste Management Stocks Q3 Recap: Benchmarking Montrose (NYSE:MEG)

Stock Story

Perma-Fix Environmental Services

-0.84%

Clean Harbors

+0.68%

Montrose Environmental

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the waste management stocks, including Montrose and its peers.

Waste management companies can possess licenses permitting them to handle hazardous materials. Furthermore, many services are performed through contracts and statutorily mandated, non-discretionary, or recurring, leading to more predictable revenue streams. However, regulation can be a headwind, rendering existing services obsolete or forcing companies to invest precious capital to comply with new, more environmentally-friendly rules. Lastly, waste management companies are at the whim of economic cycles. Interest rates, for example, can greatly impact industrial production or commercial projects that create waste and byproducts.

The 9 waste management stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.6%.

Luckily, waste management stocks have performed well with share prices up 12.3% on average since the latest earnings results.

Montrose

Founded to protect a tree-lined two-lane road, Montrose provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.

Montrose reported revenues of $224.9 million, up 25.9% year on year. This print exceeded analysts’ expectations by 10.9%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.

Montrose Chief Executive Officer and Director, Vijay Manthripragada, commented, “I am thrilled to announce another outstanding quarter as our record 2025 continues. The credit goes to our ~3,500 colleagues around the world to whom I am incredibly grateful. Demand for our services is elevated, driven by broader market forces, increased domestic industrial production in our key geographies and state and provincial regulations. This is our third consecutive quarter of record results, including free cash flow1 generation that exceeded expectations. Our outperformance year to date is primarily due to strong organic growth across all three of our segments and the resultant operating leverage, which continues to drive margin accretion. "

Montrose achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 14% since reporting and currently trades at $21.12.

We think Montrose is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q3: Perma-Fix

Tackling hazardous waste challenges since 1990, Perma-Fix provides environmental waste treatment services.

Perma-Fix reported revenues of $17.45 million, up 3.8% year on year, outperforming analysts’ expectations by 7.1%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.

The market seems happy with the results as the stock is up 6.9% since reporting. It currently trades at $13.76.

Weakest Q3: Clean Harbors

Established in 1980, Clean Harbors provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.

Clean Harbors reported revenues of $1.55 billion, up 1.3% year on year, falling short of analysts’ expectations by 1.6%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EPS estimates.

Clean Harbors delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 4.1% since the results and currently trades at $256.30.

Read our full analysis of Clean Harbors’s results here.

Waste Management

Headquartered in Houston, Waste Management is a provider of comprehensive waste management services in North America.

Waste Management reported revenues of $6.44 billion, up 14.9% year on year. This print lagged analysts' expectations by 0.9%. Overall, it was a slower quarter as it also logged a miss of analysts’ adjusted operating income estimates and a slight miss of analysts’ revenue estimates.

The stock is up 3.6% since reporting and currently trades at $221.40.

Read our full, actionable report on Waste Management here, it’s free.

Republic Services

Processing several million tons of recyclables annually, Republic provides waste management services for residences, companies, and municipalities.

Republic Services reported revenues of $4.21 billion, up 3.3% year on year. This number came in 0.8% below analysts' expectations. It was a slower quarter as it also recorded a significant miss of analysts’ sales volume estimates and a slight miss of analysts’ revenue estimates.

The stock is flat since reporting and currently trades at $212.00.

Read our full, actionable report on Republic Services here, it’s free.

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A Look Back at Waste Management Stocks’ Q3 Earnings: Clean Harbors (NYSE:CLH) Vs The Rest Of The Pack

Stock Story

Casella Waste Systems

-2.34%

Perma-Fix Environmental Services

-0.84%

Clean Harbors

+0.68%

Montrose Environmental

+0.36%

Enviri

-0.37%

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Clean Harbors and the rest of the waste management stocks fared in Q3.

The 9 waste management stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.6%.

Luckily, waste management stocks have performed well with share prices up 15.4% on average since the latest earnings results.

Weakest Q3: Clean Harbors

Established in 1980, Clean Harbors provides environmental and industrial services like hazardous and non-hazardous waste disposal and emergency spill cleanups.

Clean Harbors reported revenues of $1.55 billion, up 1.3% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income and EPS estimates.

“Our third-quarter performance reflected continued growth in our Technical Services and Safety-Kleen Environmental Services revenues,” said Eric Gerstenberg, Co-Chief Executive Officer.

Clean Harbors delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 8.5% since reporting and currently trades at $267.02.

Read our full report on Clean Harbors here, it’s free.

Best Q3: Perma-Fix

Tackling hazardous waste challenges since 1990, Perma-Fix provides environmental waste treatment services.

The market seems happy with the results as the stock is up 13.8% since reporting. It currently trades at $14.64.

Enviri

Cooling America’s first indoor ice rink in the 19th century, Enviri offers steel and waste handling services.

Enviri reported revenues of $574.8 million, flat year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 52.3% since the results and currently trades at $18.57.

Read our full analysis of Enviri’s results here.

Montrose

Founded to protect a tree-lined two-lane road, Montrose provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.

Montrose reported revenues of $224.9 million, up 25.9% year on year. This print beat analysts’ expectations by 10.9%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.

Montrose achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 3.9% since reporting and currently trades at $23.62.

Read our full, actionable report on Montrose here, it’s free.

Casella Waste Systems

Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella offers waste management services for businesses, residents, and the government.

Casella Waste Systems reported revenues of $485.4 million, up 17.9% year on year. This number surpassed analysts’ expectations by 1.9%. Aside from that, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.

Casella Waste Systems had the weakest full-year guidance update among its peers. The stock is up 26.5% since reporting and currently trades at $104.80.

Read our full, actionable report on Casella Waste Systems here, it’s free.

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Small-Company Stocks Are Rising. Why the Rally Could Last This Time. — Barrons.com

Dow Jones Newswires

Casella Waste Systems

RBC Bearings Incorporated 5.00% Series A Mandatory Convertible Preferred Stock

0.00%

By Paul R. La Monica

Small-cap stocks are off to a hot start in 2026 and they're beating their larger counterparts so far this year. The Russell 2000 index is up more than 6% already this month, outperforming the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite indexes to kick off 2026. One possible reason? Chalk it up to the January effect, the tendency of small-cap stocks to pop in the first month of the year.

Small stocks often do well to start the year before giving up some gains to better-known indexes. Some market experts suggest that it's a case of investors looking for lesser-known bargains at the beginning of the year, companies that may have been left behind in the previous 12 months.

But this rally could go on longer. The Russell 2000 and the S&P Small Cap 600 indexes have both underperformed the large-cap indexes for several years. The hope is that this trend could reverse itself in 2026 thanks to lower interest rates — since small companies often have more floating-rate debt than big companies — and a resilient U.S. economy.

Favorable valuations might help, too. Smaller companies tend to trade at discounts to blue chip stocks, but the gap is now wider than usual. The S&P Small Cap 600 currently trades at around 15.6 times earnings estimates for 2026, according to FactSet. That's 31% lower than the S&P 500's price-to-earnings ratio of 22.6. The S&P Small Cap 600 has tended to trade at just a 25% discount to the S&P 500 over the past five years, though, so there is room for upside if that valuation gap narrows.

"It's now more interesting to look at smaller companies that have been left behind," said Samuel Rines, macro strategist with WisdomTree.

That's especially true when you consider that profits for smaller companies are expected to grow at a slightly faster clip than earnings for the S&P 500.

According to data from FactSet, earnings per share for the S&P Small Cap 600 are forecast to rise 15.4% in 2026 compared to 14.8% growth for the S&P 500. So it's no longer the case that investors have to flock to the S&P 500 and the megacap technology stocks of the Magnificent Seven to find better earnings.

"Don't fight the trend. We're starting to see a broadening out of this rally and small caps are participating," said Sean Clark, chief investment officer with Clark Capital. Clark told Barron's that his firm has been adding small-caps, particularly value stocks, to some of his portfolios.

Others think small-caps in sectors outside of tech could perform well this year, too. Peter Roy, a portfolio manager with Argent Capital, told Barron's that he likes industrial stocks, such as aerospace and defense equipment maker RBC Bearings, as well as healthcare stocks, most notably Ensign Group, which operates skilled nursing and senior living centers. Roy owns both stocks in the Argent Focused Small Cap exchange-traded fund.

Roy also said that he wouldn't be surprised to see more takeover activity in the market this year, thanks to low interest rates and a favorable regulatory environment. That could give small stocks a lift.

"Mergers and acquisitions could be a natural tailwind for small-caps," he said, noting in particular that small garbage-collection and landfill firm Casella Waste Systems could be a target for larger rivals such as Waste Management, Republic Services, or Waste Connections.

Roy also thinks that smaller banks could get scooped up, adding that regional lender Glacier Bancorp in Montana might be a potential acquisition.

But even if there isn't an uptick in merger activity, small-caps still might benefit from the combination of a favorable rate environment and relatively stable economy in the U.S. It might finally be time for investors to play small ball again after years of focusing almost exclusively on the market's giants. This may not be a one-and-done rally for small-caps that lasts only through January.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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