Casella Waste shares jump after earnings, guidance

Shares of Casella Waste Systems Inc. rose Thursday after the garbage collector and recycler said its fiscal fourth-quarter loss narrowed, and guided for fiscal 2009 revenue above Wall Street estimates.

The stock gained $1.66, or 13.7 percent, to $13.75 in morning trading. They have ranged from $9.64 to $16.20 over the past year.

JPMorgan analyst Scott Levine boosted his rating on the Rutland, Vt.-based company to "Overweight" from "Neutral" and said a landfill development program should start to pay off this fiscal year.

Free cash flow will likely double in 2009, helped in part by new landfill operations and lower capital expenditures, he said.

"This combination should enable Casella to bring its debt closer to its target range, thereby lowering interest expense and enhancing earnings-per-share growth," Levine wrote in a note to clients.

For fiscal 2009, he now expects earnings of 15 cents per share, compared with his previous estimate of 7 cents per share. On average, analysts polled by Thomson Financial expect income of 10 cents per share.

Canaccord Adams analyst Eric Prouty kept a "Buy" rating and $20 price target, implying he expects the stock to rise 65 percent from Wednesday's $12.09 close