Analysts Are Betting On Waste Management, Inc. (NYSE:WM) With A Big Upgrade This Week

Waste Management, Inc. (NYSE:WM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the most recent consensus for Waste Management from its seven analysts is for revenues of US$26b in 2025 which, if met, would be a decent 20% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 21% to US$7.94. Previously, the analysts had been modelling revenues of US$23b and earnings per share (EPS) of US$7.93 in 2025. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

See our latest analysis for Waste Management

Even though revenue forecasts increased, there was no change to the consensus price target of US$230, suggesting the analysts are focused on earnings as the driver of value creation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Waste Management's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Waste Management is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Waste Management.

Better yet, our automated discounted cash flow calculation (DCF) suggests Waste Management could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

You can also see our analysis of Waste Management's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.