UPDATE: Wunderlich Securities Downgrades Waste Management as 2014 Serves as Transition Year

In a report published Wednesday, Wunderlich Securities analyst Michael E. Hoffman downgraded the rating on

from Buy to Hold, and lowered the price target from $52.00 to $45.00. In the report, Wunderlich Securities noted, “We are lowering our rating and price target to Hold and $45 on Waste Management (WM). 2013's stock price appreciation can be looked at as two years (2013 & 2014) of performance in one. Core solid waste produced material improvement in margins and FCF in 2013 and should settle into a steady improving trend in 2014. However, WTE and Recycling remain margin and FCF drags: they actually underperformed expectations in 2013 and are not expected to be better than flat y/y in 2014. "Recycling is in a multi-year change in the operating model and WTE does not need to be owned 100% by WM for it to get the strategic advantage of disposal. The catalyst to own WM in 2014 would be a sale of all or part of WTE and or Recycling margins permanently improving faster than expected (not a paper price play).” Waste Management closed on Tuesday at $41.72.