Waste Management (WM) is a waste management and environmental services company in North America serving residential, commercial, industrial, and municipal customers. (See Insiders’ Hot Stocks on TipRanks)
Let’s take a look at the company’s financial performance and what has changed in its key risk factors that investors should know.
Risk Factors
According to the new Tipranks Risk Factors tool, Waste Management’s main risk category is Legal & Regulatory, which accounts for 31% of the total 35 risks identified. The next two major risk factor contributors are Production and Finance & Corporate, which stand at 20% and 14%, respectively.
Waste Management has added one risk factor under the Macro & Political category. (See Waste Management stock charts on TipRanks)
Under the Economy & Political Environment sub-category, the company said, “Macroeconomic pressures and market disruption have adversely impacted our business and results of operations.”
According to Waste Management, some macroeconomic constraints intensified during Q3, owing in part to the COVID-19 pandemic. The corporation claims that the tight labor market has resulted in higher expenditures for salary adjustments, extra hours, and training new recruits in order to overcome operational issues in serving clients.
According to management, other global issues such as supply-chain disruptions, transportation constraints, and inflationary pressure may increase the company’s operational expenses, reduce margins, and have a material negative impact on the company’s results if they persist for a long time.
On a brighter note, the overall sector average for the Finance & Corporate risk factor is 50.1%, higher than the average risks in that category for Waste Management, which is 14.3%.
Financial Performance
Let’s take a look at Waste Management’s third-quarter financial figures.
The firm recorded $4.67 billion in total sales, up 20.8% year-over-year, and adjusted earnings of $1.26 per share, up 15.6% from the year-ago quarter.
Waste Management ended the third quarter of 2021 with $116 million in cash and cash equivalents and $12.4 billion in long-term debt.
Wall Street’s Take
Following the Q3 earnings release, BofA Securities analyst Michael Feniger reiterated a Sell rating on the stock and a price target of $154. This implies 2.2% downside potential to current levels.
Feniger is upbeat about the company’s “better than expected growth” in the third quarter but is concerned about “rising cost inflation & labor constraints.”
Consensus among analysts is a Moderate Buy based on 3 Buy ratings, 3 Hold ratings, and 1 Sell rating in the last three months.
The average WM price target is $163.43, reflecting 12-month upside potential of 3.8% from current levels.
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