Yahoo Finance Waste Management, Inc. Just Beat EPS By 19%: Here's What Analysts Think Will Happen Next
Investors in Waste Management, Inc. (NYSE:WM) had a good week, as its shares rose 3.7% to close at US$213 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$5.2b were in line with what the analysts predicted, Waste Management surprised by delivering a statutory profit of US$1.75 per share, a notable 19% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Waste Management
Taking into account the latest results, the current consensus from Waste Management's 21 analysts is for revenues of US$21.7b in 2024. This would reflect a reasonable 4.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 18% to US$7.29. In the lead-up to this report, the analysts had been modelling revenues of US$21.7b and earnings per share (EPS) of US$6.81 in 2024. So the consensus seems to have become somewhat more optimistic on Waste Management's earnings potential following these results.
There's been no major changes to the consensus price target of US$217, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Waste Management at US$256 per share, while the most bearish prices it at US$159. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Waste Management shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 6.5% growth on an annualised basis. That is in line with its 7.6% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 6.7% per year. It's clear that while Waste Management's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Waste Management's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Waste Management going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Waste Management , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
