Waste Management (WM) Stock Forecast & Price Target

Waste Management's stock outlook is supported by notable year-over-year growth in landfill volumes, which increased by 5.2%, driven by broad-based strength across various waste segments, including a 5.5% rise in special waste volumes. The Collection and Disposal segment demonstrated operational efficiency with a 100 basis points expansion in EBITDA margin, excluding the impact of non-repeating activities, indicating strong underlying financial health. Additionally, the company's healthcare sector contributed significantly to both revenue and EBITDA, and overall synergies from operational improvements have positively impacted SG&A, leading to substantial margin enhancements across its business segments.

Waste Management's negative outlook is primarily driven by lower-than-expected revenue and adjusted EBITDA, with Q3 revenue reaching $6,541.7 million, which fell short of both consensus and internal estimates due to reduced acquisitions and weaker sales in recycled commodities, renewable energy, and healthcare solutions. The company's adjusted free cash flow (FCF) of $996.2 million was notably lower than anticipated, attributed to timing issues, although the firm maintains its annual FCF guidance. Furthermore, the company has revised its fiscal year 2025 revenue guidance down to between $25.275 billion and $25.475 billion, citing ongoing challenges with commodity prices and anticipated headwinds in recycling.