Barclays upgrades Casella Waste Systems stock rating on integration progress

Barclays upgraded Casella Waste Systems (CWST) to Equalweight from Underweight, raising its price target to $95.00 from $88.00. This upgrade follows Casella's strong Q3 2025 results, which surpassed analyst expectations with an EPS of $0.42 and revenue of $485.4 million, alongside a raised 2025 guidance and improved 2026 outlook. Barclays cited easing margin headwinds and reduced execution concerns regarding the Mid-Atlantic integration efforts, noting the company's progress, although maintaining some caution pending further operational improvements.

Analysis

Barclays upgraded Casella Waste Systems (CWST) to Equalweight from Underweight, simultaneously raising its price target to $95.00 from $88.00. This positive revision was primarily driven by Casella's robust Q3 2025 results, which included an EPS of $0.42 against a $0.32 projection and revenue of $485.4 million exceeding the $476.49 million estimate. The company also provided a raised 2025 guidance and a better-than-expected 2026 outlook.

Barclays specifically cited easing margin headwinds and reduced execution concerns regarding the Mid-Atlantic integration efforts as key catalysts. The research firm noted that system integration is now 50% complete, with significant truck deliveries occurring in Q3 2025, aligning with prior expectations. This progress suggests less risk to CWST achieving year-over-year margin expansion in 2026.

Despite the upgrade, Barclays maintained an Equalweight rating, reflecting some caution pending further operational improvements, rather than an outright Buy. Casella's shares currently trade at 15 times next-twelve-months EV/EBITDA, which is in line with municipal solid waste peers, indicating a fair valuation relative to the sector. The positive earnings surprise and revenue beat were well received by investors in premarket trading.

Key Decisions for Investors

• Monitor Casella Waste Systems (CWST) for continued operational execution, particularly regarding the remaining 50% of its Mid-Atlantic system integration and fleet optimization efforts.
• Consider the implications of easing margin headwinds and the improved 2026 outlook, which could support sustained financial performance and potentially warrant further analyst upgrades.
• Evaluate CWST's current valuation of 15x NTM EV/EBITDA against peers, recognizing that while the recent upgrade is positive, Barclays maintains an Equalweight rating due to ongoing operational improvement requirements.