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 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.