"The 12-month target price for WM has recently
been changed to $37.00 from $35.00...we see sequential improvement
in collections and disposal price and volume,
while recycling prices stabilize. Margins
should benefit from $130M in cost savings in
Obviously S&P along with its analysts missed the last 5-6 conference calls, guidance and 8 year run rate with this stock. It has no where to go but down. Incremental savings from operational improvements are being hacked by reduced volume and pricing. Competition is only increasing with volumes reducing year over year. It is what it is.
It is good to see that the nation is wasting less year over year, but my take is that reduced volumes reflect the fall off in construction the past 5-6 years. Pick ups in construction are likely to see increases in volumes for WM, and that's pretty much the story here. If construction doesn't rebound, neither will WM, but I personally think construction will come back due to demographic pressures. In the interim, there's a strong dividend.