Waste Management Stock: Is a Rebound Taking Shape?

The North American waste management leader presents investors with a complex picture. While grappling with disappointing quarterly earnings and a lowered revenue outlook, the company has simultaneously demonstrated unexpected resilience in its profitability metrics. This period of mixed signals coincides with a significant transition in its financial leadership, creating a pivotal moment for the environmental services provider.

A major change is underway in the executive suite. After more than eight years as Chief Financial Officer and nearly 23 years with the company, Devina Rankin is retiring. Her successor, David Reed, steps into the role during a time of focused strategic investment in sustainability initiatives. The company is advancing its recycling and renewable energy projects, representing a $3 billion investment portfolio. Furthermore, the integration of the 2024 Stericycle acquisition remains on track, with cost synergies projected between $80 million and $100 million for 2025.

Quarterly Results Send Conflicting Messages

Waste Management's Q3 earnings report provided grounds for both concern and cautious optimism. The corporation reported earnings per share of $1.98, falling short of the $2.01 consensus estimate. Revenue of $6.44 billion also missed analyst projections. However, a deeper look reveals a substantial 14.9 percent year-over-year revenue increase.

The most notable positive from the report was the company's margin guidance. Despite trimming its overall revenue expectations, Waste Management raised its forecast for the adjusted operating EBITDA margin to a range of 29.6 to 30.2 percent. This upward revision points to highly effective cost control measures—a particularly valuable capability in the current economic climate.

Should investors sell immediately? Or is it worth buying Waste Management?

Analyst Outlook and Future Catalysts

Currently trading significantly below its 52-week high, the stock has declined more than eight percent since the start of the year. Despite this weakness, market analysts maintain a guardedly positive stance, with a consensus price target of $248.25. This implies a potential upside of over 38 percent from current levels.

The upcoming Investor Day is anticipated to provide fresh momentum. Updated long-term targets through 2027 are expected, including core business revenue growth of four to six percent and EBITDA growth of six to eight percent over the next two years.

The critical question remains whether the new CFO can unlock the dormant potential within this waste industry giant. The foundational elements for a recovery appear to be in place; successful execution is now the necessary next step.