As more waste volume gets diverted from landfills to recycling and energy recovery facilities, Morgan Stanley finds investors are concerned about a net negative operating income impact.

The broker estimate Cleanaway Waste Management's landfill volume reduction could be circa -5% per annum. In the broker's view, the company's existing reprocessing project pipeline can fully offset this landfill earnings erosion without any need to expand market share.

Equal-Weight rating. Target rises to $2.78 from $2.50. Industry view: Cautious. 

Sector: Commercial & Professional Services.

Target price is $2.78.Current Price is $2.83. Difference: ($0.05) - (brackets indicate current price is over target). If CWY meets the Morgan Stanley target it will return approximately -2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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