How Waste Management's Profitability And Competitive Positioning Caught This Analyst's Eye

Waste Management, Inc. WM has industry-leading unit profitability and its local competitive positioning is strong, according to Goldman Sachs.

The Waste Management Analyst: Jerry Revich initiated coverage of Waste Management with a Buy rating and a price target of $145.

The Waste Management Thesis: The company has steadily grown its EBITDA per employee and has meaningfully outperformed the industry average since 2015, Revich said in the initiation note.

Waste Management EBITDA per employee has risen by 34% from 2008 to 2020, he added.

“WM has the strongest market share at the local level in our coverage, with landfill + transfer station market share at 47% within a 50-mile radius and 54% when excluding transfer stations,” the analyst wrote. This supports “the company’s +10% pricing premium on a spot basis relative to its footprint,” he added.

“For capital deployment, we expect a rising focus on stock buybacks following the company’s recent Advanced Disposal Services acquisition,” Revich further mentioned in the note.

WM Price Action: Shares of Waste Management are up 0.62% to $132.42 Wednesday morning.

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