Key Takeaways:
- Pricing Leadership: 4.9% average yield on related revenue showcases disciplined execution
- Price Projection: Based on current assumptions, RSG stock could reach $327 by December 2029
- Potential Gains: This target implies a total return of 49% from the current price of $219
- Annual Return: Investors could see roughly 11% annual growth over the next 3.9 years
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Republic Services (RSG) delivered another quarter of margin expansion despite headwinds in construction and manufacturing.
- The company achieved 80 basis points of adjusted EBITDA margin improvement in Q3, reaching 32.8% while navigating volume declines.
- CEO Jon Vander Ark is executing a strategy centered on pricing discipline and operational efficiency. Even with volume pressure, Republic grew adjusted EBITDA by over 6%.
- Average yield on related revenue was 4.9%, while open-market pricing was 8.6%. Customer retention remained strong at 94%, while year-to-date adjusted free cash flow reached $2.19 billion.
Despite near-term challenges, Republic Services stock trades at $219, offering upside for investors who recognize the company’s pricing power.
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What the Model Says for Republic Services Stock
We analyzed Republic based on its ability to drive consistent earnings growth through pricing discipline and operational excellence.
The company is navigating a challenging demand environment while maintaining pricing ahead of inflation.
Management’s long-term growth algorithm remains intact—mid-single-digit revenue growth with EBITDA, EPS, and free cash flow growing faster, typically producing 30 to 50 basis points of annual margin expansion.
Using a forecast of 5.6% annual revenue growth and 14% operating margins, our model projects the stock will rise to $327 within 3.9 years, assuming a 30.2x P/E multiple at exit.
This represents slight compression from Republic’s current 30.7x multiple, acknowledging near-term headwinds from softer volumes and a $100 million revenue headwind in 2026 from non-recurring event-driven landfill activity.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for RSG stock:
1. Revenue Growth: 5.6%
Republic’s growth centers on pricing strength offsetting volume pressure.
Pricing Power: The company achieved 7.2% core price increase on related revenue in Q3. Small-container pricing reached 9.2%, large-container pricing hit 7.1%, and residential pricing came in at 6.8%. Management expects to maintain a 75 to 100 basis point price-to-cost spread going forward.
Volume Stabilization: While volumes declined 30 basis points in Q3, early signs of stabilization are emerging. Environmental Solutions created a 140-basis-point headwind to total company revenue, but demand stabilized by quarter-end and the pipeline is rebuilding.
2026 Headwind: Republic recorded $100 million of event-driven revenue at 80% margins in 2025 from hurricane cleanup that won’t repeat.
2. Operating margins: 20.8%
Republic is delivering consistent margin expansion through pricing discipline and cost management.
Adjusted EBITDA margin expanded 80 basis points to 32.8% in Q3. Excluding event-driven volumes, the underlying margin expanded 90 basis points. The Recycling & Waste segment posted a 34.3% margin, up 150 basis points year over year.
Labor as a percentage of revenue improved 70 basis points, reflecting benefits from the RISE technology platform and pricing ahead of wage inflation.
3. Exit P/E Multiple: 30.2x
The market currently values Republic at 30.7x next twelve months’ earnings. We assume modest compression to 30.2x through our forecast period.
Republic’s P/E has averaged 32.7x over the past year and 29.4x over five years. The premium multiple reflects consistent execution, strong free cash flow generation of $2.19 billion annually, and a track record of shareholder value creation.
The essential service nature, high customer retention, and ability to price through inflation justify the valuation.
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What Happens If Things Go Better or Worse?
Waste management companies face macro sensitivity but benefit from essential service models. Here’s how Republic Services stock might perform under different scenarios through December 2029:
- Low Case: If revenue growth slows to 5.0% and margins compress slightly, the stock still offers a 5.6% annual return, reaching $272.
- Mid Case: With 5.6% growth and 14% margins, we expect an annual return of 10.7%, with the stock reaching $327.
- High Case: If construction recovers and Republic maintains strong execution, returns could hit 15.2% annually, driving the stock to $383.
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In the low case, construction and manufacturing weakness persists longer than expected.
In the high case, end markets recover by late 2026, Environmental Solutions returns to growth ahead of schedule, and acquisitions drive incremental margin expansion.
How Much Upside Does Republic Services Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
