Waste Management (WM) Stock Forecast & Price Target

Waste Management is positioned for strong financial growth, with FY25 revenue guidance set between $25.55 billion and $25.80 billion, reflecting an anticipated increase of 15.8-16.9%, bolstered by robust organic growth in solid waste and significant contributions from sustainability initiatives. The company showcases a commitment to improving operational efficiency, with management forecasting $250 million in synergies from its recent acquisition of Stericycle, highlighting strong prospects for margin expansion and value creation. Additionally, Waste Management's sustainability goals reflect a strategic focus on environmental responsibility, aiming for a 42% reduction in GHG emissions and a significant increase in materials recovery by 2030, which aligns with evolving market demands and enhances long-term profitability.

Waste Management's outlook is negatively impacted by a decrease in its EBITDA margin to 28.9%, reflecting a decline from the previous year and falling short of consensus expectations. The company faces significant risks, including reduced demand for special waste and industrial volumes, elevated interest rates, fluctuations in commodity recycling prices, and potential changes in renewable tax credits, alongside the challenges posed by the closure of several large landfills. Additionally, the projected wind-down of capital expenditures by the end of 2026 raises concerns about future cash flows, which may be constrained under base case commodity assumptions, further complicating the company’s financial stability.