On Tuesday, Truist Securities adjusted its outlook on Waste Management (NYSE: WM), increasing the stock's price target from $235.00 to $250.00 while maintaining a Buy rating. This move followed Waste Management's reported third-quarter earnings, which exceeded expectations, and an uplifted forecast for 2024 driven by a robust performance in its core Solid Waste business.
The analyst from Truist Securities provided insights on the revised target, noting the improvement in projected earnings per share (EPS) for the year 2025 to $7.82, up from the previous estimate of $7.66. The positive revision is partly attributed to the potential benefits from the upcoming acquisition of Stericycle, which is expected to modestly contribute to the company's earnings in 2025.
Waste Management's management has confirmed that the acquisition of Stericycle (Hold) is on course to be finalized in the fourth quarter of 2024. The analyst expressed optimism regarding the acquisition, particularly due to a more positive outlook on potential cost synergies than what was previously communicated during the July earnings call.
The raised outlook and the anticipated advantages from the Stericycle acquisition are seen as incremental tailwinds for Waste Management. The company's stronger than expected third-quarter results and the raised 2024 outlook underscore its solid performance within the waste management industry.
In other recent news, Waste Management Inc (NYSE:WM). has been making significant strides in its merger with Stericycle Inc (NASDAQ:SRCL)., receiving approvals from antitrust authorities in the United States, Portugal, and the UK. The merger is expected to complete in the fourth quarter of 2024, despite regulatory scrutiny from the Competition Bureau of Canada. Waste Management also reported a record 30% operating EBITDA margin and double-digit EBITDA growth in the second quarter of 2024, largely due to effective pricing strategies and operational efficiencies. In terms of financial projections, BofA Securities increased the price target for Waste Management to $225, maintaining a Neutral rating, while anticipating a significant increase in earnings for the year 2025. Baird and BMO Capital Markets have also revised their price targets, maintaining Neutral and Market Perform ratings, respectively. These recent developments highlight Waste Management's strategic investments, financial health, and potential for future growth.
InvestingPro Insights
Waste Management's strong performance and positive outlook, as highlighted in the article, are further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $87.92 billion, reflecting its significant position in the Commercial Services & Supplies industry.
InvestingPro Tips indicate that Waste Management has raised its dividend for 20 consecutive years, demonstrating a commitment to shareholder returns that aligns with the company's solid financial performance. This is particularly relevant given the company's recent earnings beat and raised forecast for 2024.
The company's revenue growth of 6.17% over the last twelve months and 7.91% in the most recent quarter underscores the robust performance in its core Solid Waste business mentioned in the article. Additionally, the EBITDA growth of 12.12% over the last twelve months suggests improving operational efficiency, which could be further enhanced by the anticipated cost synergies from the Stericycle acquisition.
It's worth noting that Waste Management is trading near its 52-week high, with a price that is 97.35% of its 52-week high. This aligns with the positive sentiment expressed in the Truist Securities analyst's raised price target.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Waste Management, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.