UPDATE: Wedbush Securities Upgrades Waste Management to Neutral, Raises PT
In a report published Friday, Wedbush Securities upgraded its rating on Waste Management (NYSE: WM) from Underperform to Neutral, and raised its price target from $30.00 to $34.00.
Wedbush Securities noted, “Our upgrade is predicated on the following: (i) Q4 survey results suggest uptick to landfill volumes in the quarter and into 1H:13, aided by Hurricane Sandy; (ii) 1.5-1.9% base yield (price) in 2013 and 2014, up from sub-1% in 2012; (iii) recovery in commodity prices suggest guidance above our model and more consistent with five-year price average; (iv) uptick in volume and stabilized pricing suggests that downside risk to FCF expectations is significantly reduced. While we do not expect the recovery in WM's operating profile to be smooth, we believe downside risk to our estimates has eased considerably. We now see a more balanced risk/reward profile, with 2013 downside risk likely protected by the monetization of cost savings and restructuring efforts. In addition, we are more confident about a marginal improvement in the business environment and, with reduced pricing concerns, we now believe WM can deliver EBITDA margin improvement of 40-60 bps over the next 4-6 quarters.”
Waste Management closed on Thursday at $35.27.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Tags: Wedbush Securities