Covanta could rise 40%: Barron's

"Despite the reduced guidance, Covanta's (CVA) growth strategy is intact," David Englander says, in a Barron's piece that extols the virtues of the waste-to-energy company.

CVA cut its FY13 outlook on October 23 (adjusted EPS now seen at $0.33-0.43 versus previous guidance of $0.40-0.50) and the shares have struggled since, falling around 14%.

Englander notes that the factors blamed for CVA's disappointing guidance are likely temporary, and at 8.6x EBITDA, the shares look "inexpensive given the quality of the business."

Also mentioned: The company's acquisition of the Camden Resource Recovery Facility, a 20-year deal with New York City that begins in 2015, and the possibility of a buyout above $25/share.

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