Deutsche Bank Waste Services: What to Watch in Q3 Results and Company Updates
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Deutsche Bank expects WM, Republic Services (RSG) and Waste Connections (WCN) to post broadly in-line Q3 2026 results, with EBITDA the key metric to watch. Diesel prices rose roughly 50% year-over-year in the quarter and stayed elevated into early October, exceeding prior expectations; fuel surcharges should partially offset the cost pressure despite a lag. OCC (old corrugated containers) prices recovered faster than expected, offering possible upside, though RIN prices declined and volume trends remain uncertain. The labor environment remains favorable for waste companies even as other labor-intensive industries face wage inflation. Looking to 2027, pricing and yield should stay supportive on CPI increases and AI-driven pricing tools, with diesel expected to decline quarter-by-quarter. WM Healthcare is expected to turn positive in Q3, with year-over-year growth accelerating to 7% in Q4. Casella Waste received New York State approval to expand the Hakes C&D landfill, adding about 5.8 million cubic yards of disposal capacity. Target prices were trimmed for higher capital costs: WM Buy, USD 270 to 255; WCN Buy, 220 to 191; RSG Buy, 270 to 258; CWST Hold, 103 to 95.
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