Oppenheimer Believes Waste Management (WM) Still Has Room to Grow

In a report released today, Noah Kaye from Oppenheimer maintained a Buy rating on Waste Management (WM), with a price target of $108. The company’s shares closed yesterday at $98.84, close to its 52-week high of $100.

Kaye said:

“Shares were up modestly Thursday after WM solidly beat 4Q18 EPS consensus and guided FY19 adj. EBITDA in line/EPS 3pct below consensus. Management continues to see broad-based strength in solid waste, including growthier segments (e.g., C&D tons, commercial volumes), reflecting an outlook for 4pct yield plus volume growth. While implied margins are flattish, underlying solid waste operating margins are expected to see 50bps expansion; the delta is a $100M step-up in SG&A, primarily for technology investments in areas such as customer-facing tools and fleet ADAS that we believe will likely have strong ROI. In view of improving baseline FCF growth, we raise our PT to $108 (from $95).”

According to TipRanks.com, Kaye is a 4-star analyst with an average return of 6.4% and a 56.6% success rate. Kaye covers the Industrial Goods sector, focusing on stocks such as Rockwell Automation Inc, Caterpillar, and BorgWarner.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Waste Management with a $103.67 average price target, which is a 4.9% upside from current levels. In a report issued on February 5, Raymond James also maintained a Buy rating on the stock with a $101 price target.

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The company has a one-year high of $100 and a one-year low of $79.96. Currently, Waste Management has an average volume of 2.02M.

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Waste Management, Inc. engages in provision of waste management environmental services. It operates through the following business segments: Tier 1. Tier 2 and Tier 3. The Tier 1 segment comprises exclusively of areas in the Southern United States. The Tier 2 segment comprises predominately of areas located in the Midwest and Northeast United States.

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