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Waste Management (WM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Waste Management (WM) closed at $117.77 in the latest trading session, marking a +0.65% move from the prior day. This move outpaced the S&P 500's daily gain of 0.45%. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.75%.

Heading into today, shares of the garbage and recycling hauler had gained 3.42% over the past month, outpacing the Business Services sector's gain of 1.04% and lagging the S&P 500's gain of 3.84% in that time.

WM will be looking to display strength as it nears its next earnings release, which is expected to be July 25, 2019. In that report, analysts expect WM to post earnings of $1.08 per share. This would mark year-over-year growth of 6.93%. Meanwhile, our latest consensus estimate is calling for revenue of $3.94 billion, up 5.39% from the prior-year quarter.

WM's full-year Zacks Consensus Estimates are calling for earnings of $4.31 per share and revenue of $15.63 billion. These results would represent year-over-year changes of +2.62% and +4.82%, respectively.

Any recent changes to analyst estimates for WM should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% higher. WM currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that WM has a Forward P/E ratio of 27.16 right now. This represents a premium compared to its industry's average Forward P/E of 27.09.

It is also worth noting that WM currently has a PEG ratio of 3.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Waste Removal Services stocks are, on average, holding a PEG ratio of 3.01 based on yesterday's closing prices.

The Waste Removal Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 226, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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