GFL Environmental: Solid 2Q26 Results; Reiterating Overweight Recommendation Amid Take-Private Risks

Research evidence excerpt

GFL Environmental: Solid 2Q26 Results; Reiterating Overweight Recommendation Amid Take-Private Risks

J P M O R G A N North America Credit Research

30 July 2026

Overweight

GFL Environmental GFLCN

Solid 2Q26 Results; Reiterating Overweight

Recommendation Amid Take-Private Risks

North America Corporate Credit -

Credit View Aerospace & Defense (HY & IG) and

GFL Environmental’s (GFLCN) 2Q26 results were modestly ahead of our Industrials (HY) and Services (HY)

expectations. While EBITDA margins were impacted by M&A as well as Yilma Abebe AC

commodities and diesel prices, the company had solid overall performance. (1-212) 270-3265

yilma.abebe@jpmorgan.com

With GFL Environmental confirming it has received preliminary expressions Austin Maltbia

of interest for a take-private transaction, we think 2Q earnings are less of a (1-212) 834-4684

austin.maltbia@jpmchase.com

focus for credit investors. While the likelihood of an LBO is difficult to J.P. Morgan Securities LLC

handicap, and acknowledging this important risk factor, we are maintaining

our Overweight recommendation based on the following assumptions:

1. We think the high-water mark for GFL’s net leverage in an LBO is likely

~6x. While credit markets could underwrite GFL LBO debt with leverage

higher than 6x, we think 6x is a reasonable base case assumption. If

markets are willing to underwrite the GFL credit with leverage

meaningfully higher than 6x it would be a risk to our Overweight rating on

the company’s existing debt.

2. GFL pro forma net debt ~$12.5 billion, using 6x pro forma LTM EBITDA

(GFL + Secure Waste) ~$2,080 million. For simplicity we are assuming

Secure Waste shareholders get all cash in an LBO.

3. GFL’s longer dated bonds stay in place while the company may take out

front end bonds to extend duration.