How Baird's Upgrade Amid WM's Earnings Miss Could Shift Its Sustainability-Focused Investment Narrative

• In late October 2025, Waste Management, Inc. announced an earnings miss for the third quarter, updated its 2025 revenue guidance to the low end of the previous range due to softer recycled commodity prices and lower healthcare revenue, and highlighted ongoing tuck-in acquisition plans to expand its operations.
• An upgrade by Baird to "Outperform" soon followed, reflecting heightened analyst confidence in Waste Management’s operational improvements, investment in sustainability, and successful expansion into healthcare waste management despite recent earnings headwinds.
• We’ll explore how Baird’s increased confidence in Waste Management’s cost controls and sustainability efforts could impact its investment outlook.

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Waste Management Investment Narrative Recap

To be a Waste Management shareholder, you need to believe that the company’s push into sustainability, paired with efficiencies through technology and ongoing acquisition activity, will drive steady revenue growth despite economic swings and commodity price changes. The latest news, an earnings miss and a revision of 2025 revenue guidance, may cause near-term concern, but it does not meaningfully change the most important short-term catalyst: successful integration of its healthcare and recycling investments. The biggest risk right now remains margin pressure from volatile recycled commodity prices and regulatory shifts, and this risk is still front of mind.

A key announcement worth highlighting is Waste Management’s affirmation of its plan to pursue additional tuck-in acquisitions. This approach is highly relevant to the current catalysts, as targeted smaller deals aim to deepen the company’s competitive moat and expand its capabilities, particularly in sustainability and healthcare. Continued discipline in acquisitions and cost controls are what investors are watching for as critical drivers of near-term performance.

Yet, despite these strengths, one risk investors should be aware of is the potential impact of changing recycled commodity prices on profit margins and cash flow…

Read the full narrative on Waste Management (it's free!)

Waste Management's narrative projects $29.4 billion revenue and $4.0 billion earnings by 2028. This requires 7.0% yearly revenue growth and a $1.3 billion increase in earnings from the current $2.7 billion.

Uncover how Waste Management's forecasts yield a $246.64 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Ten retail investors in the Simply Wall St Community estimate Waste Management’s fair value from US$199.95 to US$246.64 per share. With recycled commodity prices affecting near-term earnings, these differing views underline the varied ways market participants are weighing future profit potential.

Explore 10 other fair value estimates on Waste Management - why the stock might be worth as much as 22% more than the current price!

Build Your Own Waste Management Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Waste Management research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Waste Management research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Waste Management's overall financial health at a glance.

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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.

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