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Waste Management (WM) Gains As Market Dips: What You Should Know

Zacks Equity Research

Waste Management (WM) closed at $115.16 in the latest trading session, marking a +0.18% move from the prior day. This change outpaced the S&P 500's 0.84% loss on the day. Meanwhile, the Dow lost 0.53%, and the Nasdaq, a tech-heavy index, lost 1.47%.

Coming into today, shares of the garbage and recycling hauler had lost 1.79% in the past month. In that same time, the Business Services sector gained 0.8%, while the S&P 500 gained 5.2%.

WM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.15, unchanged from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4 billion, up 4.58% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.33 per share and revenue of $15.63 billion, which would represent changes of +3.1% and +4.81%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for WM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. WM is currently a Zacks Rank #2 (Buy).

Investors should also note WM's current valuation metrics, including its Forward P/E ratio of 26.57. For comparison, its industry has an average Forward P/E of 27.51, which means WM is trading at a discount to the group.

Also, we should mention that WM has a PEG ratio of 3.1. 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. WM's industry had an average PEG ratio of 2.97 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 34, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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