Waste Management (WM): A Fresh Look at Valuation as Analyst Projections and Investor Optimism Build Before Earnings

There has been a noticeable buzz around Waste Management (WM) lately, and it is not just about tidy neighborhoods. Recent analyst estimate revisions, paired with moderate investor optimism, have put WM squarely in the spotlight ahead of its upcoming earnings release. Solid earnings and revenue projections are making investors wonder if the company’s steady performance and growing dividend profile could make it a dependable pick in the current climate.

If you zoom out beyond the weekly headlines, Waste Management’s story is a string of upward moves over the past five years. The stock is up 89% over that stretch and continues to best the broader market with consistent, moderate momentum. Recent performance has been steadier, with a year-to-date return of about 9% and a one-year gain just above 6%. This resilience is supported by strategic investments in new growth areas such as recycling and renewable energy, which keep sentiment constructive even as near-term returns cool off a bit.

With the market appearing upbeat and new money eyeing the stock, are investors looking at a value opportunity with Waste Management, or is the current price already accounting for the next leg of growth?

Most Popular Narrative: 15% Undervalued

The current narrative around Waste Management sees the stock as materially undervalued, with analysts expecting meaningful upside based on its future earnings profile and margin expansion.

The integration and optimization of WM Healthcare Solutions are on track to deliver significant synergies, anticipated to reach $250 million annually by 2027, positively impacting earnings. The continued focus on scaling the core business through acquisitions, with a robust pipeline and expected higher levels of solid waste M&A, could drive revenue growth.

What is the real engine driving this double-digit valuation gap? Rumors swirl about aggressive margin improvements and ambitious financial targets. The intriguing part is that the math behind these expectations could redefine what is possible for an essential services titan like Waste Management. Ready to discover which forecasted leaps and profitability moves shape this bullish call?

Result: Fair Value of $257.3 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, potential challenges such as the loss of renewable energy credits or unforeseen economic pressures could pose headwinds to Waste Management’s bullish outlook.

Find out about the key risks to this Waste Management narrative.

Another View: Market Compares Differently

While the analyst outlook leans on future profits and growth, comparing Waste Management against industry averages reveals the shares are more highly valued than most competitors. This may indicate that optimism has already been priced in.

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Waste Management to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Waste Management Narrative

If you think the story could unfold differently or you prefer digging into the numbers yourself, try building your own narrative. No expertise required, just a few minutes. Do it your way

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.

Looking for More Smart Investment Ideas?

Why settle for just one opportunity? Use the Simply Wall St screener to uncover stocks you might have missed and get a head start on your next potential win.

• Tap into market leaders offering reliable income potential by checking out stocks with consistent yields over 3% through dividend stocks with yields > 3%.
• Unleash your growth strategy by scanning for undervalued companies. Leverage undervalued stocks based on cash flows to spot hidden gems others might overlook.
• Navigate the forefront of digital disruption by evaluating firms driving revolutionary changes in finance and security with cryptocurrency and blockchain stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com