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Waste Management (WM) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Waste Management (WM) closed at $114.90, marking a -0.65% move from the previous day. This change lagged the S&P 500's daily loss of 0.2%. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq lost 0.3%.

Heading into today, shares of the garbage and recycling hauler had gained 1.57% over the past month, outpacing the Business Services sector's loss of 0.02% and the S&P 500's loss of 0.25% in that time.

Wall Street will be looking for positivity from WM as it approaches its next earnings report date. This is expected to be October 23, 2019. On that day, WM is projected to report earnings of $1.15 per share, which would represent no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4 billion, up 4.58% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.33 per share and revenue of $15.63 billion. These totals would mark changes of +3.1% and +4.81%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for WM. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. WM is currently a Zacks Rank #3 (Hold).

Digging into valuation, WM currently has a Forward P/E ratio of 26.73. This valuation marks a discount compared to its industry's average Forward P/E of 27.27.

Meanwhile, WM's PEG ratio is currently 3.12. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Waste Removal Services industry currently had an average PEG ratio of 3.05 as of yesterday's close.

The Waste Removal Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 171, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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