WM (NYSE:WM), formerly known as Waste Management, delivered better-than-expected first-quarter financials. While the top and bottom lines of this waste and environmental services provider surpassed the Street’s estimates, analysts’ average price targets show limited upside potential in WM stock from current levels.
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Its revenue of $4.89 billion came slightly ahead of the analysts’ consensus estimate of $4.85 billion. Meanwhile, its adjusted earnings of $1.31 per share exceeded the Street’s forecast of $1.29.
WM’s focus on sustainable growth, reduction of costs through technology and automation, and ongoing investments in high-return recycling and renewable energy growth projects augur well for future revenue and earnings.
WM reiterated its full-year guidance. The company anticipates a 4% to 5.5% rise in top-line revenue. At the same time, WM expects to generate adjusted operating EBITDA in the range of $5.825 billion to $5.975 billion in 2023. Management also highlighted that 2023 would be its peak investment year, supporting long-term growth.
While WM’s steady performance and progress on landfill gas projects are positives, the benefits of its aggressive investments in sustainability-related projects could take time before materially impacting its financials.
On April 6, BMO Capital analyst Devin Dodge increased his price target on WM stock to $167 from $158. However, the analyst reiterated his Hold recommendation. Dodge expects the company to benefit from its green investments, which would strengthen its position as a sustainability leader. However, many of the positives are already reflected in WM’s stock price, noted the analyst. Doge sees WM’s risk-reward ratio as balanced near current levels.
What is the Price Target for WM?
Analysts have an average price target of $169.56 on WM stock, implying a limited upside potential of 3.64%.
The stock has received three Buy and eight Hold recommendations on TipRanks, translating into a Moderate Buy consensus rating.
