Waste Connections heads into its July 22 Q2 earnings report with options traders flashing the most defensive positioning seen in months — even as the stock has quietly rallied nearly 10% over the past month.
The clearest pre-earnings signal comes from options. The put/call ratio jumped to 1.31 on July 17, more than two standard deviations above its 20-day average of 0.96 — a reading that places it among the more cautious postures of the past year. That shift has been abrupt: the PCR was running below 0.98 as recently as early July, meaning the hedging demand built up in a matter of days. The stock closed at $171.91 on July 17, up roughly 9.4% over the past month but off 1.4% on the day — a pattern consistent with investors locking in some gains while buying downside protection into the release.
Short interest, by contrast, tells a less alarming story even as the raw numbers have moved. Bears have added roughly 54% more shares to their positions over the past month, lifting SI to about 1.2% of the free float. That is a notable acceleration in pace, but the absolute level remains low. The borrow market confirms there is no squeeze pressure: availability is effectively unlimited, with far more shares available to lend than are currently borrowed, and cost to borrow runs at just 0.53%. The ORTEX short score of 29 is modest and has crept only gradually higher — the short-side buildup looks more like cautious pre-earnings positioning than a conviction bear trade.
The analyst debate heading into the print is defined by a tension between operational resilience and volume headwinds. JP Morgan trimmed its price target to $195 from $210 on July 13, maintaining its Overweight rating — a signal that the Street still sees upside from the current $171.91 price but is trimming expectations after the stock's recent run. Bulls point to WCN's demonstrated pricing power: 6.6% price gains drove 70 basis points of margin expansion in Q2 even as volumes fell 2.6%, and further margin improvement is projected for 2026. Bears flag the persistent volume decline and softness in recycled commodity prices, which together dented revenue expectations by roughly $30 million in the second half outlook. The consensus mean target of $203 implies meaningful upside, though at roughly 30x earnings the valuation leaves limited room for execution stumbles.
One noteworthy data point from the ownership table: CEO and founder Ronald Mittelstaedt bought 50,000 shares at $152.24 on May 12, a $7.6 million commitment at a price well below where the stock now trades. That purchase preceded the month-long rally and adds a layer of insider conviction that the options-market hedging does not fully reflect. The earnings print will test whether the company's pricing discipline can continue offsetting volume weakness — and whether margin expansion is durable enough to justify a valuation that has rerated sharply higher over the past six weeks.
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