UPDATE: Societe Generale Downgrades Waste Management to Sell, Lowers PT to $28.50
Societe Generale lowers its rating on Waste Management (NYSE: WM) to Sell from Buy and cuts its price target to $28.50 from $43.50 per share as it does not share consensus expectations of 11.6 percent EPS for the company.
Societe Generale notes, "The slowdown our economists at SG now forecast in US GDP (to 1.4% from 1.8% in 2011) could lead to cuts in consensus EPS estimates. WM has announced that its interim dividend will grow only 4.5% in 2012, vs. annual growth of 8.9% over 2005/2011. We suspect management is expecting first half operating results to impact 2012 EPS. Our new 2011-13e forecasts are 2% below consensus at the EBITDA level and 3.9% below at the EBIT level. Our EPS stands well below with an 8% gap to average (2011/13). We think the 2011 FY presentation (no date announced yet) should see the company cutting its buy-back program ($600m in 2011e) to a limited $100-200m, as in 2009. The worst case scenario would be for no buy-back at all. "
WM closed at33.42 per share on Tuesday.
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