On May 23, JPMorgan adjusted its stance on GFL Environmental Inc. (NYSE:GFL)’s stock from “Overweight” to “Neutral”. However, the firm has increased its price objective to $54.00 from the prior target of $51.00. The re-rating took place after the company sold its Environmental Services business to private equity owners.
An excavator at a landfill site operating amidst a pile of solid waste.
GFL Environmental Inc. (NYSE:GFL) retained a $1.7 billion equity interest in the business. The company plans to use up to $3.75 billion of net proceeds from this transaction to repay debt. JPMorgan noted GFL Environmental Inc. (NYSE:GFL)’s improved cash conversion as a percentage of EBITDA. That being said, there are expectations that its EBITDA margins might trail peers over the medium term as a result of its lower landfill ownership.
However, the implementation of Extended Producer Responsibility (EPR) in Canada can result in a near-term volume boost. Looking ahead, JPMorgan believes that GFL Environmental Inc. (NYSE:GFL) possesses significant capacity for growth with the help of low-risk, highly accretive tuck-in solid waste acquisitions.
This strategic approach can help enhance its market position and financial performance over the long term. GFL Environmental Inc. (NYSE:GFL) offers non-hazardous solid waste management and environmental services.
While we acknowledge the potential of GFL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GFL and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now
Disclosure: None.
