CLHB - Clean Harbors - stock is attractively valued at 22.5x next year's estimates

Clean Harbors, Inc. is cleaning up investors' portfolios. The company is increasing its incinerator capacity which should spur strong revenue growth. The company will be reporting fourth-quarter earnings on February 27. Over the past 60 days, earnings estimates for the quarter have increased two cents to 67 cents per share. It earned 56 cents last year for the fourth quarter.

Full Analysis

Clean Harbors, Inc. (CLHB) , through its subsidiaries, provides environmental services in North America. It operates through two segments, Technical Services and Site Services. The Technical Services segment collects, transports, treats, and disposes hazardous and non-hazardous wastes for commercial and industrial customers, health care providers, educational and research organizations, and other environmental services companies and governmental entities.

It offers resource recovery and fuels blending, incineration, landfills, wastewater treatment, and explosives management services; and cleanpack services, including handling, packaging, transportation, and disposal of laboratory quantities of outdated hazardous chemicals, household hazardous wastes, and waste pesticides and herbicides. The Site Services segment provides environmental site services to maintain industrial facilities and process equipment, as well as clean up of hazardous materials to chemical, petroleum, transportation, utility, and governmental agencies.

In early-January, the shares got a boost after Wedbush Morgan Securities analyst upgraded the stock because Clean Harbors' growing incinerator capacity will increase its revenue. Analyst Al Kaschalk raised his rating on Clean Harbors shares to "Strong Buy" from "Buy," and increased his price target to $64 per share from $62. The "Strong Buy" rating means Kaschalk expects the stock to rise 20% or more in the next six to 12 months, and his price target implies 26.9% growth.

CLHB also got a boost when it released third-quarter numbers that beat expectations in early-November. The company reported third-quarter earnings of $12.9 million, or 63 cents a share, on revenue of $245.5 million. Analysts anticipated earnings of 57 cents a share and revenue of $238.5 million. For the year, Clean Harbors sees revenue growth of 12% to 13%, up from its prior guidance.

The company will be reporting fourth-quarter earnings on February 27. Over the past 60 days, earnings estimates for the quarter have increased two cents to 67 cents per share. It earned 56 cents last year for the fourth quarter. The stock is attractively valued at 22.5x next year's estimates, slightly above its long-term growth rate of 20%. The ROE is a stellar 25%.

Content Courtesy: Zacks Investment Research

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