Waste Connections' (WCN) Q4 results outperformed Street forecasts but 2026 guidance came in below consensus at the midpoint, RBC Capital Markets said in a note Sunday.

According to the report, Q4 results largely followed trends from recent quarters, with ongoing strength across the core business being partially countered by weaker recycled commodities/RIN prices.

The 2026 outlook indicated revenue growth of 4.8% at the midpoint and adjusted EBITDA margin expansion of 30 to 40 basis points, the report said.

The analysts said the focus this quarter was the free cash flow guidance of $1.4 billion to $1.45 billion, which was impacted by nearly $100 million to $150 million of Chiquita-related costs, versus $200 million last year. These costs, the report said, are expected to decline further in 2027.

RBC sees the 2026 outlook as a conservative starting point as management has not factored in any commodity price or macro improvements. The firm said Waste Connections remains well-positioned for acquisitions worth about $4.5 billion to $5 billion.

RBC maintained an outperform rating on Waste Connections but lowered the price target to $210 from $219.

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