The firm said it lowered its rating on the company, which owns and operates infrastructures for the conversion of waste to energy, as it believes valuation has been fully realized after 37% year to date gains.
"We believe Covanta can grow free cash flow through 2018 with a full year of the Dublin, Ireland project where we estimate a full year adds $73 million in EBITDA and $30 million in free cash flow," Barclays said.
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Barclays has a $24 price target on Covanta stock.
Shares of Covanta are lower by 1.03% to $24.11 at the start of trading this morning.
Separately, TheStreet Ratings team rates COVANTA HOLDING CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate COVANTA HOLDING CORP (CVA) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."