Republic Services (RSG) missed Q4 revenue expectations due to lower-than-expected volumes and weakness in its environmental solutions segment, Morgan Stanley said in a Wednesday note.

The report said its 2026 revenue guidance was no better, missing estimates by over 100 basis points.

The company expects environmental solutions to improve but the business they are winning now may not emerge until H2 2026 or even early 2027 due to longer sales cycle, the note said.

"We appreciate the defensive nature of the business, which is especially notable during times of economic uncertainty," the report said. "However we note the recent weakness in Environmental Solutions has been a headwind unique to RSG."

Morgan Stanley cut its price target to $225 from $230 while keeping its equal-weight rating.

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