Waste Management, Inc. (NYSE:WM) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like the results were a bit of a negative overall. While revenues of US$15b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.9% to hit US$3.91 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Waste Management after the latest results.
Taking into account the latest results, the current consensus from Waste Management's 15 analysts is for revenues of US$16.4b in 2020, which would reflect a modest 6.2% increase on its sales over the past 12 months. Statutory earnings per share are expected to ascend 16% to US$4.55. Before this earnings report, analysts had been forecasting revenues of US$16.3b and earnings per share (EPS) of US$4.63 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$126, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Waste Management at US$140 per share, while the most bearish prices it at US$81.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Waste Management shareholders.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Analysts are definitely expecting Waste Management's growth to accelerate, with the forecast 6.2% growth ranking favourably alongside historical growth of 3.3% per annum over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 5.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Waste Management is expected to grow at about the same rate as the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$126, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Waste Management going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Waste Management's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.