S&P Outlook:
AW is target of insider buying.
We expect the company to benefit from pricing initiatives primarily in the commercial collection and landfill
segments, and well-controlled operating expenses. We see higher prices for new contracts and fuel
recovery fees offsetting rising fuel costs. However, volume should continue to decline due to a slowing
economy and a soft housing construction market.
Risks to our recommendation and target price include significantly higher fuel costs that the company
is unable to pass onto customers. Allied Waste reported per-share earnings of $0.75 (before a $0.04
net charge) in 2007. We expect a 27% annual increase to $0.95 for
2008, and a 16% improvement to $1.10 for 2009. Our 12-month target
price of $15 is 16 times our 2008 estimate, reflecting a below.peer P/E multiple.
http://astuk-virtuallystocks.blogspot.com/
$12.76 (05/16/08)
