Waste Management's Pricing Power And Long Term RNG Opportunity Wins Analyst Attention

Citigroup analyst Bryan Burgmeier initiated coverage on Waste Management Inc WM with a Buy rating and a price target of $183.
WM is the largest operator in the high-quality U.S. waste business, nearly double the size of the next largest competitor.
The company is poised to benefit from whitespace growth in renewable natural gas investing $825 million through 2026 to add $400 million in run-rate EBITDA.
While Burgmeier acknowledges 2022 stock outperformance, the RNG opportunity is still underappreciated, with 76 more candidate landfills vs. 17 announced.
The analyst views the company's pricing power and long-term opportunity in renewable natural gas as "underappreciated."
Through resilient FCF generation, WM can continue to drive op improvements (investing $800 million in recycling to generate $180 million EBITDA by 2026) and bolt-on M&A.
Near-term, the Street is underappreciating collection & disposal yield, and the analyst opened a 90-day catalyst watch, expecting WM to beat when the company reports 4Q earnings on February 1.
Price Action: WM shares traded higher by 2.62% at $157.91 on the last check Friday.

Momentum73.93

Growth34.38

Quality49.92

Value20.33

Short

Medium

Long

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