BMO Capital Markets has adjusted its outlook on Waste Management (NYSE: NYSE:WM), reducing the price target to $213 from the previous $215, while sustaining a Market Perform rating on the shares.
The adjustment came on the back of the company's second-quarter results for the fiscal year 2024, which did not meet expectations. The volume environment for Waste Management has been less vigorous than projected in earlier guidance.
"While Q2/24 results were softer than expected and the volume environment is proving to be less robust than assumed in prior guidance, we believe there is good visibility into WM's earnings growth runway over the next 2-3 years," the analyst said on Friday.
The firm noted that despite the softer-than-anticipated performance in the recent quarter, Waste Management still has a clear path to earnings growth over the coming two to three years.
"However, we believe this outlook is largely captured in the current valuation. We rate WM shares Market Perform," said the analyst.
InvestingPro Insights
In light of the recent analysis by BMO Capital Markets, it's worth considering additional insights from InvestingPro. Waste Management (NYSE:WM) has demonstrated a commitment to shareholder returns, having raised its dividend for 20 consecutive years and maintained dividend payments for 27 consecutive years, signaling a robust track record of returning value to investors.
InvestingPro data shows that Waste Management has a market capitalization of $80.23 billion, with a P/E ratio standing at 31.64. Despite a recent dip in stock price, with a 1-week total return of -10.27%, the company's revenue growth over the last twelve months as of Q2 2024 has been positive at 4.77%. This suggests that while the stock has faced recent volatility, the underlying business continues to expand.
Moreover, analysts on InvestingPro have flagged that the stock is trading at a high earnings multiple, indicating that its current valuation is rich relative to near-term earnings growth. This aligns with BMO Capital Markets' view that the anticipated earnings growth may already be reflected in the stock's current market price.
For readers looking to delve deeper into Waste Management's financials and future outlook, InvestingPro offers additional insights. There are currently 12 more InvestingPro Tips available, which can provide a more nuanced view of the company's performance and potential. Interested readers can use the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for a comprehensive analysis.
Visit InvestingPro for a detailed analysis of Waste Management: https://www.investing.com/pro/WM
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