CLH - Upstream Looks Favorable; Buy

Research evidence excerpt

CLH - Upstream Looks Favorable; Buy

Truist Securities

We calculate overall EBITDA upside vs. Street could be 2-3% in ’26 driven by elevated chemical

production. We assume baseline Tech Services y/y revenue growth of ~7%, which the Street is also guiding to

in 2026. We estimate chemical disposal volumes make up ~40% of CLH’s disposal business, while disposal is

~50% of the total Tech Services segment. If we assume ~15% chemical waste volume growth y/y, Tech

Services revenue upside would be ~3%, and overall company revenue upside would be ~1%. We estimate

EBITDA upside of 2-3% driven by the high value disposal margin estimate of ~50%. For reference,

Independent Commodity Intelligence Services (ICIS) linear low density polyethylene (LLDPE) production

volume is up y/y for the last five consecutive months, including +23% in April (most recent data available) and

~15% YTD. The last time a comparable string of positive y/y growth occurred was in 2023. We acknowledge

slightly easier y/y LLDPE production comps in 1H26 than 2H26. We believe different petrochemical products’

production volumes move directionally together.

Figure 1: Elevated Chemical Production Estimated Impact on Tech Services y/y Revenue Growth

Source: ICIS, Truist Securities Research

Chemical production forecasts have increased over the medium term. LLDPE 2026 production forecasts

have moved ~7% higher in the last three months. Production forecasts for 2027 have also increased by ~4%

since February. ICIS notes in the April forecast report that production should remain strong throughout most of

2026, an addition vs. previous monthly forecast reports.

Figure 2: LLDPE Monthly Production Historical Data + Forecasts from February and May 2026 (M lbs)

*Forecasts are for quarterly periods

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