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On Friday, HSBC analyst Wesley Brooks upgraded Waste Management (NYSE:WM) stock from Hold to Buy, setting a new price target of $265, up from the previous target of $210. The revision reflects a positive outlook on the company’s performance in a volatile market environment. According to InvestingPro data, WM’s stock has demonstrated remarkably low price volatility, with a beta of 0.67 over the past five years.
Waste Management, known for its waste collection and disposal operations, has been recognized for its robust business model which has proven to be defensive amid market uncertainties. With the company holding a leading position in landfill market share within the United States, it has consistently delivered strong financial results, with current EBITDA reaching $6.57 billion and an impressive ROE of 36%. InvestingPro analysis indicates the company has maintained dividend payments for 21 consecutive years, showcasing its financial stability.
The analyst pointed out that Waste Management’s commitment to sustainability and the expansion of complementary services are expected to contribute to its long-term growth. An estimated 13% earnings per share (EPS) compound annual growth rate (CAGR) is projected from 2025 to 2027.
Brooks also noted that Waste Management’s stock is perceived as one of the least vulnerable to the adverse impacts of tariffs and potential economic downturns that could be driven by tariff disputes. This resilience, combined with the company’s solid financial performance and strategic investments, underpins the rationale for the upgraded rating and increased price target.
In other recent news, Waste Management has announced a substantial investment of $3 billion to enhance its recycling and renewable natural gas (RNG) infrastructure from 2022 to 2026. The company has opened several new facilities, including recycling sites in Baltimore and Central Texas, and RNG facilities in Chicago and Philadelphia, marking a significant step in its sustainability efforts. These developments are part of a broader initiative that aims to increase annual recycling capacity by over 2.8 million tons and RNG production by 25 million MMBtu each year. Meanwhile, analysts from Raymond (NSE:RYMD) James and Oppenheimer have maintained their Outperform ratings on Waste Management, highlighting the company’s strategic investments in sustainability and the promising returns expected from these projects. Erste Group has upgraded Waste Management’s stock rating to Buy, citing strong growth prospects and a favorable valuation compared to its peers. Jefferies has also raised its price target for Waste Management shares to $257, following a robust financial quarter where revenue and EBITDA exceeded expectations. The company’s strategic relationship with Stericycle (NASDAQ:SRCL) is expected to yield $250 million in synergies, contributing to margin expansion. These recent developments underscore Waste Management’s commitment to sustainability and its potential for continued growth and profitability.
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