‘Trash King’ hits a rough patch, but Wall Street isn’t dumping WM
It’s not a glamorous reputation, but somebody has to haul the trash. And for decades, Waste Management Inc. has built one of the most reliable business models on Wall Street by collecting garbage, recycling materials, and turning landfill byproducts into energy.
Investors have rewarded that steady demand with years of consistent growth. But recently, the stock has hit a bump in the road.
Earnings missed expectations and the shares have struggled to keep pace with the broader market.
Nevertheless, institutional analysts aren’t hitting the panic button. In fact, many believe Waste Management’s long-term outlook still looks attractive.
What WM is up against
Like many large-cap industrial companies, Waste Management is navigating a mix of operational challenges and major strategic moves.
The company recently reported quarterly EPS of $1.93, slightly below expectations. Revenue of $6.31 also came up short vs. forecasts. Even so, several big initiatives could shape the company’s future.
The acquisition of Stericycle represents an expansion into regulated medical waste. Automation upgrades at recycling plants aim to improve efficiency. And there’s an ongoing expansion of environmental services across North America.
These projects show WM pushing beyond garbage collection into broader environmental services … but market-watchers warn that pivot coincides with a few risks:
- High debt levels tied to expansion/acquisitions
- Execution risk associated with integrating Stericycle
- A P/E ratio near 36 vs. industry average near 24
Despite these concerns, the stock remains near its high point and has gained about 7% year-to-date to slightly outperform the broader market.
Slow and steady still wins the race
One reason WM bulls remain calm boils down to the fact that trash collection comes with built-in durable demand. Households, cities, and businesses produce waste in good and bad economic times alike. And that reality has helped Waste Management build a massive infrastructure network that would be near-impossible for competitors to match in the foreseeable future.
Big money continues to show support. About 80% of shares are owned by institutions, and large funds like Banque Cantonale Vaudoise recently increased positions. Analysts assign WM a “moderate buy” rating with an average target above $253. Shares ended Tuesday’s session down sharply at $235.54.
Meanwhile, the company raised its dividend to $0.945 per quarter, continuing a long history of shareholder payouts.
Projected growth remains modest but steady, with 2026 earnings expected to rise just under 9% and 2027 growth projections around 14%.
WM stock might not deliver explosive growth like Big Tech startups, but that’s precisely the point. Analysts note that boring companies providing essential services have the luxury of compounding slowly but consistently, often building investor wealth for decades.