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Waste Management, Inc. (WM), founded in 1987 and headquartered in Houston, Texas, is a leader in environmental solutions across the U.S. and Canada. Offering waste collection, recycling, and disposal services, the company operates over 250 landfills, 97 material recovery facilities, and hundreds of transfer stations. Waste Management also generates renewable energy from landfill gas, processes recyclables, and provides specialized services in construction, remediation, and waste management for industrial sectors.
Valued at $87.6 billion by market cap, shares of the garbage and recycling hauler climbed 28.4% over the past 52 weeks and 21.3% on a YTD basis, slightly lagging behind the broader S&P 500 Index ($SPX), which rallied nearly 31.1% over the past year and 24.1% in 2024.
However, zooming in further, WM stock has slightly outperformed the VanEck Environmental Services ETF’s (EVX) 27.6% return over the past 52 weeks and 20.8% YTD gains.
Waste Management’s journey in 2024 has been steady, if not groundbreaking. While the stock hasn’t quite overtaken the S&P 500 Index, it is riding the green wave thanks to resilient demand for its services. Population growth and tech-driven efficiencies are creating a fertile ground for expansion, amplified by its Stericycle acquisition, which promises stronger earnings and cash flow.
A standout moment came with its Q3 earnings release on Oct. 28 after the bell, when shares surged 5.2% in the subsequent trading session. Revenue grew 8% annually to $5.6 billion, and adjusted EPS climbed 20.2% to $1.96, smashing expectations.
Waste Management’s strategic investments in fleet modernization, technology, and disciplined pricing strategies paid off, driving adjusted operating EBITDA up 11% and achieving a record 30.5% margin. Even more enticing, management signaled robust FCF growth ahead. With a strong foundation and an eye on efficiency, Waste Management looks poised to turn consistency into a long-term competitive edge.
For the current fiscal year, ending in December, analysts expect Waste Management’s EPS to grow 17.9% year over year to $7.30. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
WM stock has a consensus “Moderate Buy” rating overall. Among the 20 analysts in coverage, nine suggest a “Strong Buy,” one advises a “Moderate Buy,” and the remaining 10 analysts recommend a “Hold.”
This configuration is slightly more bullish than three months ago, with eight analysts advising a “Strong Buy.”
Last month, Truist Securities saw Waste Management as a growth story worth following, boosting its price target from $235 to $250 and reiterating a "Buy" rating. Stellar Q3 earnings and a promising 2024 outlook impressed, but it was the Stericycle acquisition, with untapped synergies, that stole the spotlight. With 2025 EPS estimates raised to $7.82, Truist anticipates more wins ahead in this waste-to-wealth journey.
The mean price target of $232.31 implies an upside potential of about 6.1%. However, the Street-high target price of $255 suggests that the stock could rally as much as 16.4%.
