Waste Management, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

The quarterly results for Waste Management, Inc. (NYSE:WM) were released last week, making it a good time to revisit its performance. Revenues were US$5.2b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.75 were also better than expected, beating analyst predictions by 19%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Waste Management

Taking into account the latest results, the consensus forecast from Waste Management's 18 analysts is for revenues of US$21.6b in 2024. This reflects a satisfactory 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 18% to US$7.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$21.7b and earnings per share (EPS) of US$6.81 in 2024. So the consensus seems to have become somewhat more optimistic on Waste Management's earnings potential following these results.

There's been no major changes to the consensus price target of US$220, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Waste Management analyst has a price target of US$259 per share, while the most pessimistic values it at US$159. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Waste Management's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 7.6% over the past five years. Compare this to the 157 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it looks like Waste Management is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Waste Management following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$220, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Waste Management analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Waste Management you should know about.

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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.