Republic Services (RSG)

The sleeper story is AI-powered pricing already live and working - they're using dozens of variables to optimize customer-specific price increases, and the 40 bps yield deceleration masks surgical pricing that's likely improving retention. Everyone will focus on the ES weakness, but the real story is operational leverage hitting stride with 90 bps underlying margin expansion despite macro headwinds. The binding constraint is management's pricing discipline - they're deliberately sacrificing volume (especially residential) to maintain returns, which is smart capital allocation in a weak demand environment. Jon's most telling quote: 'We're going to take price, right? We need to get a return on the work that we do' - this is a returns-focused management team playing the long game. My view changes if ES pipeline conversion disappoints in H2 or if the AI pricing benefits don't show up in 2H yield trends.