JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Friday, JPMorgan analyst Tami Zakaria upgraded Waste Management (NYSE:WM) stock from Neutral to Overweight and raised the price target significantly to $277 from the previous $225. Currently trading at $233.32, near its 52-week high of $239.32, the stock maintains an EV/EBITDA multiple of 17.45x. The new price target represents a notable increase and is based on a valuation multiple of approximately 16 times the forward year one enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) along with a free cash flow (FCF) yield of around 3%. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with multiple valuation metrics suggesting premium pricing.
Zakaria’s upgrade reflects a positive outlook on the company’s future, citing expectations for high single-digit percentage revenue and EBITDA growth over the next five years, particularly at the higher end in the earlier years. The company has already demonstrated strong performance with revenue growth of 10.77% in the last twelve months and maintains a solid dividend track record, having raised its dividend for 21 consecutive years. This growth projection is anticipated to be shared in greater detail during the company’s Analyst Day in June. InvestingPro subscribers have access to 14 additional key insights about Waste Management’s financial health and growth prospects.
The analyst pointed out that Waste Management’s EV/EBITDA multiple has remained stable compared to its peers, which have seen re-ratings of 1 to 5 times in the last twelve months (LTM). Skepticism has surrounded the company’s acquisition of Stericycle (NASDAQ:SRCL) and its ongoing spending on renewable natural gas (RNG) projects. However, Zakaria believes that the valuation gap between Waste Management and its peers will narrow as the company’s revenue and cost synergies from the Stericycle acquisition and sustainability projects start to gain traction.
The report also suggests that there is potential to increase Stericycle’s core growth profile from low single-digit percentage pre-acquisition to mid-single-digit percentage through strategies like cross-selling and improved pricing. Additionally, the EBITDA margin for the Healthcare Solutions business is expected to reach the mid-20% range in the long term.
Lastly, the analyst noted that there is upside potential to these growth targets from possible future mergers and acquisitions and EBITDA accretion from sustainability projects, especially with positive announcements regarding renewable volume obligations (RVO). With a market capitalization of $93.87 billion and an overall "GOOD" financial health rating from InvestingPro, Waste Management maintains its position as a prominent player in the Commercial Services & Supplies industry. Investors seeking detailed analysis can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which provides deep-dive insights into the company’s valuation, growth prospects, and financial health.
In other recent news, Waste Management Inc. reported its financial results for the first quarter of 2025, revealing a shortfall in both earnings per share (EPS) and revenue. The company posted an EPS of $1.58, missing the forecast of $1.69, and revenue reached $6.02 billion, below the anticipated $6.15 billion. Despite this, Waste Management saw a 12% year-over-year increase in operating EBITDA, maintaining a 30% margin in its legacy business for the fourth consecutive quarter. The company also announced the appointment of John J. Morris, Jr. as President, aligning with its People First strategy. Additionally, shareholders approved the election of all nine director nominees and ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025. Meanwhile, Raymond (NSE:RYMD) James adjusted its price target for Waste Management shares from $258.00 to $255.00, maintaining an Outperform rating due to the company’s focus on sustainable projects. Waste Management continues to advance its sustainability initiatives, including new recycling and renewable natural gas facilities.
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