U.S. Business Service: U.S. Waste: A Primer on the Renewable Energy Sector (Bernstein)
Bernstein has written a primer for investors on the renewable energy sector in the U.S.
Bernstein has written a primer for investors on the renewable energy sector in the U.S. waste industry. The main purpose of the report is to educate investors on the business models of the renewable energy sector (such as landfill gas power generation, biogas, renewable natural gas RNG, etc.). The logic behind it is that waste management companies are no longer considered just traditional public services, and their renewable resource recovery and energy utilization businesses are becoming new growth and valuation drivers. The market's understanding of the waste giant may still remain in its traditional business, and the high-growth green business is undervalued. One-sentence conclusion: The waste giant is transforming into an "energy and environmental service provider", and its renewable natural gas business is the key to future valuation improvements. Positive/negative: Positive for leading companies such as Waste Management (WM) and Republic Services (RSG). The market is gradually realizing the value of this business, but has not yet given a sufficient valuation premium. Catalysts: 1) U.S. Renewable Fuel Standard (RFS) policy dynamics; 2) Capital expenditures and capacity expansion plans of major companies on renewable energy projects; 3) Trading prices of environmental commodities such as RNG and carbon emission credits.