/Waste%20Management%2C%20Inc_%20sign%20on%20building-by%20Ken%20Wolter%20via%20Shutterstock.jpg)
Valued at a market cap of $93.9 billion, Waste Management, Inc. (WM) provides environmental solutions to residential, commercial, industrial, and municipal customers. The Houston, Texas-based company offers waste collection, transfer, recycling, resource recovery, and disposal solutions. It also owns and operates transfer stations and landfill gas-to-energy facilities that generate renewable electricity and natural gas.
This waste management company has lagged behind the broader market over the past 52 weeks. Shares of WM have gained 14.7% over this time frame, while the broader S&P 500 Index ($SPX) has surged 20.6%. However, on a YTD basis, the stock is up 15.5%, outshining SPX’s 9.6% rise.
Narrowing the focus, WM has also underperformed the VanEck Environmental Services ETF’s (EVX) 16.2% uptick over the past 52 weeks and 15.6% YTD return.
On Jul. 28, WM delivered better-than-expected Q2 results, which led to a 3.4% rise in its share price on the following day. The company’s operating revenue improved 19% year-over-year to $6.4 billion, exceeding consensus estimates by 1.4%. Moreover, due to organic revenue growth, continued cost discipline, and an optimized business mix, its adjusted EBITDA grew 18.9% from the year-ago quarter to $1.9 billion, while its adjusted EPS of $1.92 advanced 5.5% annually, topping analyst expectations by 1.6%.
For the current fiscal year, ending in December, analysts expect WM’s EPS to grow 4.3% year over year to $7.54. The company’s earnings surprise history is mixed. It surpassed the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 22 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on 12 “Strong Buy,” one "Moderate Buy," and nine “Hold” ratings.
This configuration is more bullish than three months ago, with 10 analysts suggesting a “Strong Buy” rating.
On Jul. 30, Sabahat Khan from RBC Capital maintained a "Hold" rating on WM with a price target of $234, implying a marginal potential upside from the current levels.
The mean price target of $259.76 represents an 11.5% premium from WM’s current price levels, while the Street-high price target of $277 suggests an upside potential of 18.9%.
