Waste Management Downgraded to Sector Perform with $250 Price Target
Written by Emily J. Thompson, Senior Investment Analyst
Source: seekingalpha
- Stock Performance: Waste Management (WM) saw a 2.1% increase in Wednesday's trading despite being downgraded to Sector Perform with a $250 price target by Scotiabank, primarily due to its relative performance outpacing major peers and closing the valuation gap.
- Growth Challenges: Analyst Konark Gupta noted that WM faces tough organic growth comparisons this year, particularly due to last year's wildfires, although its long-term growth outlook remains attractive, especially with Stericycle synergies ramping up.
- Shareholder Returns: WM has resumed shareholder returns this year with a $3 billion buyback authorization, supported by an estimated nearly $3.8 billion in free cash flow generation for 2026, yielding 4.3%, indicating strong financial health.
- Valuation Analysis: Gupta stated that WM's valuation is projected at 13.8x EV/EBITDA for 2026, in line with its closest peer Republic Services, suggesting that the current valuation is not demanding and presents a good long-term investment opportunity.
Analyst Views on WM
Wall Street analysts forecast WM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for WM is 247.61 USD with a low forecast of 223.00 USD and a high forecast of 266.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
15 Buy
5 Hold
0 Sell
Strong Buy
Current: 221.300
Low
223.00
Averages
247.61
High
266.00
Current: 221.300
Low
223.00
Averages
247.61
High
266.00
About WM
Waste Management, Inc. is a provider of environmental solutions. The Company provides collection, recycling, and disposal services to millions of residential, commercial, industrial, and municipal customers throughout the United States and Canada. Its segments include East Tier, West Tier, Recycling Processing and Sales, WM Renewable Energy, and WM Healthcare Solutions. East Tier primarily consists of geographic areas located in the Eastern U.S., the Great Lakes region and all of Canada. The West Tier primarily includes geographic areas located in the Western U.S., including the upper Midwest region and British Columbia, Canada. Recycling Processing and Sales includes the processing and sales of materials collected from residential, commercial, and industrial customers. WM Renewable Energy develops, operates, and promotes projects for the beneficial use of landfill gas. WM Healthcare Solutions includes Regulated Waste and Compliance Services and Secure Information Destruction services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
