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

Zacks Equity Research

Waste Management (WM) closed the most recent trading day at $119.28, moving -0.03% from the previous trading session. This change lagged the S&P 500's daily gain of 0.06%. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.13%.

Heading into today, shares of the garbage and recycling hauler had gained 2.64% over the past month, outpacing the Business Services sector's loss of 1.48% and the S&P 500's loss of 2.95% in that time.

Wall Street will be looking for positivity from WM as it approaches its next earnings report date. In that report, analysts expect WM to post earnings of $1.15 per share. This would mark no growth from the year-ago period. Meanwhile, our latest consensus estimate is calling for revenue of $4 billion, up 4.58% from the prior-year quarter.

WM's full-year Zacks Consensus Estimates are calling for earnings of $4.33 per share and revenue of $15.63 billion. These results would represent year-over-year changes of +3.1% and +4.81%, respectively.

Any recent changes to analyst estimates for WM should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.15% higher within the past month. WM is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, WM is currently trading at a Forward P/E ratio of 27.58. Its industry sports an average Forward P/E of 27.55, so we one might conclude that WM is trading at a premium comparatively.

We can also see that WM currently has a PEG ratio of 3.22. 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. 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 industry currently has a Zacks Industry Rank of 74, which puts it in the top 29% 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.

To follow WM in the coming trading sessions, be sure to utilize Zacks.com.


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