By Al Root

Shares of GFL rose Monday on the possibility that the major Canadian waste hauler will go private.

The stock, which also trades in Canada, rose 8% to $40.49 on Monday. The S&P 500 gained 0.7%.

Despite the big bump, shares were down about 6% this year and 17% over the past 12 months, through Monday trading.

That performance is part of why management is accepting offers from private-equity firms, including Apollo Management, according to people familiar with the matter.

The stock has been weak lately, along with shares of other waste haulers, because investors want more AI in their portfolios and less garbage.

Higher fuel prices have also weighed on sentiment, along with lower prices for recycled products.

GFL has been weaker, relatively speaking, with shares selling off after the company announced its $4.6 billion purchase of Calgary-based Secure Waste in April.

Declines left the stock trading at about 11 times estimated 2027 earnings before interest, taxes, depreciation, and amortization, or Ebitda. A 13 times multiple is more typical for the company.

Peers including Waste Connections and Casella Waste Systems trade for closer to 14 times. The larger Republic Services and Waste Management trade for closer to 13 times.

GFL was privately held in the past. Its IPO was in 2020. Private equity players like the stable growth and cash flow from waste handling. These days, they might be looking for things that can't be disrupted by artificial intelligence.

"Don't sell unless it's plus [$63]," wrote Maxim Sytchev, an analyst for National Bank of Canada.

"We remain firmly bullish on GFL given its growing presence in a highly defensive industry, ownership over scarce landfill assets supporting mid-single-digit pricing power, a proven and value-additive M&A playbook, as well as several organic self-help strategic and operational initiatives driving steady margin expansion through 2028," he said Sunday.

His $63 deal suggestion works out to about 14 times 2027 Ebitda, including the Secure Waste business. His official price target is $57 a share, up more than 40% higher than recent levels without a deal.

Sytchev rates shares Buy. He sees value in the stock. Investors haven't recognized that value yet. If they don't soon, private equity might.

Write to Al Root at allen.root@dowjones.com

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