Wedbush Securities Reiterates Neutral Rating, $34 PT on Waste Management on 4Q12 Shortfall
In a report published Friday, Wedbush Securities reiterated its Neutral rating and $34.00 price target on Waste Management (NYSE: WM).
Wedbush Securities noted, “Reiterate NEUTRAL as headwinds remain, despite positive 2013 volume cadence. We are maintaining our neutral stance on shares of Waste Management (WM) following the company's Q4:12 $0.57 adjusted EPS, which came in below our above-consensus estimate by $0.06. While net revenue was generally in line with our estimate, the company's margin profile continues to be negatively impacted by (i) lower price realization on sale of recycled commodities; (ii) challenging pricing environment netting sub-1% yield; and (iii) volume mix. Despite commentary to suggest cost-reduction efforts are on pace to drive over $1.1 billion in FCF in 2013, our expectation for improved margins is likely pushed out. And with investors lifting the shares on anticipation of a potential change in corporate tax structure, we believe the risk/reward profile is no better than neutral at the current stock price. Accordingly, we are reaffirming our NEUTRAL rating on WM.”
Waste Management closed on Thursday at $37.14.
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