The Australian share market may have raced higher on Monday, but the same cannot be said for the BINGO Industries Ltd (ASX: BIN) share price.
The waste management company's shares finished the day almost 3.5% lower at $2.61.
Why did the BINGO share price tumble lower today?
Investors were hitting the sell button in a panic today after analysts at Goldman Sachs removed its shares from their conviction list and downgraded them to a neutral rating.
According to the note, the broker has downgraded BINGO's shares to a neutral rating with an improved price target of $2.80. It made the move on valuation grounds following a very strong share price rise over the last few months.
Goldman points out that BINGO "has outperformed the All Ordinaries Index by 71% since we reinstated our Buy rating (on CL) on March 26, 2019. The share price has risen 75% in this period vs the ASX All Ordinaries Index up 11%."
It is worth noting that this is strictly a valuation call and Goldman remains positive on the company's prospects.
It explained: "We remain positive on the company's strategy to grow its B&D operations across Australia, to play a key role in driving greater sustainability and to increase its exposure to less cyclical C&I waste, and on the overall medium term industry outlook."
It also notes that BINGO "is well placed to benefit from: recent industry consolidation and its strong position in the Building and Demolition (B&D) waste market; synergies with Dial-a-Dump Industries (DADI); structural changes in the market following the Queensland levy implementation."
But with its shares now trading at 24x estimated FY 2020 earnings, its analysts believe they are fully valued.
BINGO wasn't the only company removed from its conviction list this morning. Goldman Sachs also took Telstra Corporation Ltd (ASX: TLS) off its list this morning for similar reasons. However, it has retained its buy rating and increased the price target on them to $4.20.
