Reassessing The Changing Outlook For Covanta Holding Corporation (NYSE: CVA)


    The Vanguard Group, Inc. recently announced the acquisition of new stake in Covanta Holding Corporation (NYSE:CVA). The institutional investor has increased its shareholding in the Industrials company by 0.55% to 11.72 million shares with purchase of 64440.0 shares. This fresh investment now brings its stake to 8.88% valued currently at $112.38 million. In addition, Norges Bank Investment Management raised its holdings by 6.59 million to 6.59 million shares. And FIL Investment Advisors (UK) Ltd. has lifted its position by 69.66% or 1.12 million shares – to 2.74 million shares.

    With over 0.59 million Covanta Holding Corporation (CVA) shares trading Tuesday and a closing price of $9.37 on the day, the dollar volume was approximately $5.51 million. The shares have shown a positive weekly performance of 3.88% and its price on 07/14/20 gained nearly 3.77%. Currently, there are 131.00M common shares owned by the public and among those 130.43M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 8 analysts who have offered their price forecasts for CVA have a consensus price objective of $9.64. The analysts have set the share’s price value over the next 12 months at a high of $13.00 and a low of $8.50 should the stock experience a downside. Incidentally, analysts’ outlook for the Covanta Holding Corporation stock is 2.60 for the next 12 months. The average price target is 2.8% above its last price level and an upside to the estimated low will see the stock lose -10.24% over that period. But an upside of 27.92% will see the stock hit the forecast high price target while mean target price for the stock is $9.00.

    Insiders at the company have transacted a total of 40 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 20 of these insider trades were purchases, accounting for 506,956 shares. Insider sales of the common stock occurred on 20 occasions, with total insider shares sold totaling 169,297 shares.

    The top 3 mutual fund holders in Covanta Holding Corporation are Undiscovered Managers Behavioral, Government Pension Fund – Global, and Vanguard Total Stock Market Index. Undiscovered Managers Behavioral owns 4.87 million shares of the company’s stock, all valued at over $46.69 million. The company bought an additional 0.22 million shares recently to bring their total holdings to about 3.69% of the shares outstanding. Government Pension Fund – Global bought 1.43 million shares to see its total holdings expand to 4.3 million shares valued at over $41.28 million and representing 3.26% of the shares outstanding. Vanguard Total Stock Market Index sold -0.12 million shares to bring its total holdings to over 3.28 million shares at a value of $31.47 million. Vanguard Total Stock Market Index now owns shares totaling to 2.49% of the shares outstanding.

    Shares of Covanta Holding Corporation (NYSE: CVA) opened at $9.05, up $0.02 from a prior closing price of $9.03. However, the script later closed the day at $9.37, up 3.77%. The company’s stock has a 5-day price change of 3.88% and 6.96% over the past three months. CVA shares are trading -36.86% year to date (YTD), with the 12-month market performance down to -46.82% lower. It has a 12-month low price of $6.57 and touched a high of $17.97 over the same period. Currently, 0.59 million shares have been traded, compared to an average intraday trading volume of 1.28 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 0.70%, 3.80%, and -24.29% respectively.

    Institutional ownership of Covanta Holding Corporation (NYSE: CVA) shares accounts for 80.70% of the company’s 131.00M shares outstanding. Mutual fund holders own 39.07%, while other institutional holders and individual stakeholders account for 39.91% and 17.17% respectively.

    It has a market capitalization of $1.19B and a beta (3y monthly) value of 1.27. The earnings-per-share (ttm) stands at -$0.21. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.26% over the week and 4.40% over the month.

    Analysts forecast that Covanta Holding Corporation (CVA) will achieve an EPS of -$0.19 for the current quarter, $0.03 for the next quarter and -$0.11 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.24 while analysts give the company a high EPS estimate of -$0.12. Comparatively, EPS for the current quarter was -$0.16 a year ago. Earnings per share for the fiscal year are expected to decrease by -93.50%, and 71.10% over the next financial year. EPS should shrink at an annualized rate of 15.00% over the next five years, compared to 47.10% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 8 brokerage firm advisors rate Covanta Holding Corporation (CVA) as a “Moderate Buy” at a consensus score of 2.60. Specifically, 2 Wall Street analysts polled rate the stock as a buy, while 6 of the 8 advise that investors “hold,” and 0 rated it as a “Sell.”

    Looking at the support for the CVA, a number of firms have released research notes about the stock. UBS stated their Buy rating for the stock in a research note on May 13, 2020, with the firm’s price target at $14-$13. Stifel coverage for the Covanta Holding Corporation (CVA) stock in a research note released on May 11, 2020 offered a Hold rating with a price target of $9.50. Stifel was of a view on April 15, 2020 that the stock is Sell, while BMO Capital Markets gave the stock Market Perform rating on April 07, 2020, issuing a price target of $18- $8. Goldman on their part issued Neutral rating on April 03, 2020.


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