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Investing.com - Raymond (NSE:RYMD) James maintained its Outperform rating and $255.00 price target on Waste Management (NYSE:WM) on Wednesday. The target represents potential upside from the current stock price of $229.84, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
The research firm expressed high confidence that Waste Management will achieve or potentially exceed its financial goals by fiscal year 2027, citing the predictable nature of the solid waste business. This confidence appears well-founded, as the company maintains strong financial health metrics with an EBITDA of $6.73 billion over the last twelve months.
Raymond James projects that the stock could offer a mid-teens internal rate of return (IRR) over the next couple of years with what it describes as "visible visibility," based on the company achieving its EBITDA targets.
The analysis includes expectations that Waste Management will deleverage back to the 2.5-3.0x range from approximately 3.6x at the end of the first quarter, while using excess cash flow for stock buybacks.
Raymond James also factored Waste Management’s "sizable and growing dividend" into its assessment, along with the possibility of the shares trading into a mid-teens EBITDA multiple range in the coming years. The company has maintained an impressive track record of raising its dividend for 21 consecutive years, with a current dividend yield of 1.41% and a recent dividend growth rate of 10%.
In other recent news, Waste Management has seen several significant developments. The company announced the results of its Annual Meeting of Stockholders, where all nine director nominees were elected to the Board of Directors, and Ernst & Young LLP was ratified as the independent registered public accounting firm for 2025. Additionally, Waste Management appointed John J. Morris Jr. as the new President, while he continues his role as Chief Operating Officer.
On the financial analysis front, JPMorgan upgraded Waste Management’s stock rating from Neutral to Overweight, raising the price target to $277, citing expectations for revenue and EBITDA growth over the next five years. William Blair maintained an Outperform rating, highlighting the potential for Waste Management to achieve over $4 billion in free cash flow by 2027. Meanwhile, Raymond James adjusted its price target slightly down to $255 but maintained an Outperform rating, emphasizing the benefits of Waste Management’s sustainable projects and the Stericycle (NASDAQ:SRCL) acquisition.
These analyst insights suggest a positive outlook for Waste Management, focusing on its strategic initiatives and financial performance.
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