Shares of WM, formerly known as Waste Management, experienced their biggest surge in three years after the company exceeded third-quarter earnings expectations and raised its guidance on free cash flow.
Impressive Q3 Results
WM (ticker: WM) reported third-quarter earnings of $1.63 per share, surpassing both the $1.54 recorded in the same quarter last year and Wall Street’s estimate of $1.61, according to FactSet. Despite falling short of expectations, the company generated $5.2 billion in revenue.
Upgraded Cash Flow Outlook
In a press release, Waste Management announced an upward adjustment in its 2023 free cash flow projection. The company now expects to generate between $1.825 billion and $1.925 billion, up from the prior range of $1.675 billion to $1.775 billion. This update reflects lower anticipated capital spending.
Market Response
Following these positive developments, Waste Management’s shares surged by 6.3% to reach $164.37 on Wednesday, marking their most significant increase since March 26, 2020, when they rose by 7.4%, as reported by Dow Jones Market Data. Furthermore, the stock’s outstanding performance has solidified its position as the leading performer in the S&P 500 index.
Industry Experts’ Opinion
UBS analysts, headed by Jon Windham, recently upgraded the shares of both Waste Management and Republic Services (RSG) from Neutral to Buy. In their analysis, they highlighted that municipal solid waste stocks have become a popular choice for investors seeking stability amidst market turbulence and potential economic slowdown driven by interest rate fluctuations.
