Wedbush Downgrades Waste Management (WM) to Neutral
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Wedbush downgraded Waste Management (NYSE: WM) from Outperform to Neutral with a price target of $68.00 (from $73.00).
Analyst Al Kaschalk commented, "With shares trading at a 17% premium to the S&P 500 P/E multiple and 30% above their 3-year average, we are downgrading shares of Waste Management (WM) to NEUTRAL from OUTPERFORM. We believe management is making the right operational decisions related to customer retention and returning recycling operations to sustained profitability. However we are increasingly concerned about peaking industry volumes, WM’s P/E-to-EPS growth rate and annual EBITDA margin normalizing in the range of 28-29%. Coupled with marginal investor waning interest in dividend income stocks, we expect shares of WM to be range bound given pressure from profit-taking and investor rotation. Given late in the cycle and our industry view that volumes do not accelerate, we downgrade to NEUTRAL on a more neutral risk/reward profile."
Shares of Waste Management closed at $62.82 yesterday.
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Related EntitiesStandard & Poor's, Al Kaschalk
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