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Valued at $81.8 billion by market cap, Waste Management, Inc. (WM) is a leading player in the waste management and environmental services sector. Based in Houston, Texas, the company specializes in comprehensive waste collection, recycling, and resource recovery solutions across North America, including operating landfill gas-to-energy facilities and transfer stations.
Shares of this garbage and recycling hauler have outperformed the broader market over the past 52 weeks. WM has surged 26.7% over this time frame, while the broader S&P 500 Index ($SPX) has gained 21.7%. In 2024, WM is up 13.9%, in line with SPX's rise on a YTD basis.
Zooming in further, WM has outpaced the Vaneck Environmental Services ETF's (EVX) 8.1% returns over the past 52 weeks and a 13.5% gain on a YTD basis.
Waste Management has outperformed due to its solid fundamentals, including high operating margins driven by technology, effective pricing strategies, and strategic acquisitions like Stericycle, along with advancements in automation and recycling.
However, on Jul. 25, the stock fell following its Q2 earnings results, which missed Wall Street’s top and bottom line estimates. Plus, a decline in collection and disposal volumes, coupled with uncertainties surrounding the $7.2 billion Stericycle acquisition, contributed to investor concerns, driving the stock down by 8%.
Nevertheless, for the current fiscal year, ending in December, analysts expect WM's EPS to grow nearly 17% year over year to $7.24. The company's earnings surprise history is promising. It beat or met the consensus estimates in each of the last four quarters.
Out of the 19 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight "Strong Buy" ratings, one "Moderate Buy," and 10 "Holds.”
The configuration is more bullish than three months ago, with six “Strong Buy” ratings on the stock.
On Jul. 26, J.P. Morgan analyst Stephanie Yee maintained a "Hold” rating on Waste Management and set a price target of $213. This new target implies a potential upside of 4.5% from current levels.
The mean price target of $221.84 represents a premium of 8.8% to WM's current levels. The street-high price target of $251, implies a notable potential upside of 23.1% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
