Waste Services: What we're watching for in 3Q results and company updates

We expect generally in-line 3Q results across WM, RSG and WCN, with EBITDA dollars the key metric to focus on as elevated diesel prices create noise in both reported revenue growth and margins. Diesel prices increased ~50% YoY in 3Q and have remained elevated into early October, well above the normalization embedded in prior 2H expectations. Pricing should remain healthy, while volumes should improve sequentially, with some potential risk to (discretionary) special waste volumes due to higher costs. The pace of OCC price recovery was ahead of expectations, which may offer some upside to the quarter and year, but RIN prices have declined and volume trends are uncertain. Overall, we see the fundamental setup as relatively stable heading into 3Q results. We've made adjustments to our models to account for higher fuel surcharges and impact from higher OCC prices, and lowered our price targets to account for higher cost of capital amidst higher rates. We maintain Buys on WM, WCN, and RSG, a