How Investors May Respond To Waste Management (WM) Q3 Earnings and Pricing Power Amid Rising Costs

• Waste Management released its third-quarter earnings results after the closing bell on October 27, attracting substantial analyst attention due to expectations for improved earnings and revenue compared to the prior year.
• Market focus has intensified on whether Waste Management’s strong pricing power can continue to offset rising labor and fuel expenses, as well as the company’s disciplined capital allocation in a high-barrier industry.
• We’ll explore how these analyst expectations around pricing power and operational efficiency could influence Waste Management’s investment outlook going forward.

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Waste Management Investment Narrative Recap

To be a long-term shareholder of Waste Management, you need confidence in the durability of its pricing power, its resilience against operational cost pressures, and the ability of its scale and capital allocation to outlast industry risks. With the upcoming third-quarter earnings release, short-term attention turns to whether robust pricing can keep offsetting higher labor and fuel costs. The event is unlikely to materially shift the biggest immediate risk: the impact of cost inflation on margins.

Among recent announcements, the continued rollout of new recycling and renewable natural gas (RNG) facilities stands out, underscoring the company’s push toward higher-margin sustainability services. This is especially relevant now, given that ongoing cost optimization and investments in recycling are at the heart of Waste Management’s thesis for steady earnings growth, even as the sector faces inflationary headwinds. But on the flip side, investors should also keep in mind that cost pressures like rising fuel and labor expenses...

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

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

Uncover how Waste Management's forecasts yield a $252.45 fair value, a 18% upside to its current price.

Exploring Other Perspectives

Fair value estimates for Waste Management from ten Simply Wall St Community members range from US$199.95 to US$252.45 per share. Some expect continued success with investments in recycling and automation, though opinions differ widely on the durability of the company’s underlying profit margins.

Explore 10 other fair value estimates on Waste Management - why the stock might be worth as much as 18% 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 3 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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