UBS analyst Jon Windham upgraded US Ecology (ECOL), Republic Services (RSG) and Waste Management (WM) to Buy from Neutral as part of a broader research note in North American Environmental Services, citing attractive valuation during a period of near-term market volatility. The analyst is also raising his price target on US Ecology to $60 from $58, Republic Services to $109 from $90, and Waste Management to $132 from $116. The analyst notes that after a 9% decline in the large Municipal Solid Waste space from mid-February highs, the companies' free cash flow yield spread relative to the 10-year Treasury rate has risen to 315bps vs. 240bps average over the past 12 months. Windham adds that he anticipates "significant cash-flow generation and strong balance sheets" to support accelerated share repurchases in the first half of 2020 if the stock market is to remain weak. The analyst further sees Waste Connections (WCN) as his top pick, forecasting free-cash-flow growth of 13.7% over the next 5 years given the M&A optionality of its balance sheet.

Raymond James raised the firm's price target on WM to $229 from $219 and keeps an Outperform rating on the shares. WM's idiosyncratic multiyear capital deployment campaign towards sustainable projects continues to add an interesting wrinkle to the story in out years, the analyst tells investors in a research note. Its M&A capital deployment strategy should prove accretive and dynamic in time, and Raymond James views WM as a potential beneficiary of new PFAS regulations as they could capture a portion of remediation work in coming years.

Sees Q2 adjusted EBITDA $715M-$723M. Comments taken from Q1 earnings conference call.