What changed
$WM — Waste management, recycling, and renewable energy services.
🎯 Q1 FY26 | Rev $6B | EPS $1.81 vs $1.74 🟢 | Margin 23.4%
💡 Consensus expects steady but unexciting growth from WM's core collection business. The market is underestimating the compounding earnings power from WM's renewable natural gas (RNG) investments and recycling automation.
🏢 Business Quality: 8/10 | Valuation: fair
📉 Reward/Risk: Upside: 12% to $252 (based on 30x FY2026 EPS of $8.40, a slight premium to historical average due to RNG growth). Downside: 8% to $207 (based on 25x FY2026 EPS of $8.28, a discount if RNG thesis fails). Ratio: 1.5:1.
🔮 Catalyst: Q2 2026 earnings (late July 2026). Key metric: RNG production volume and recycling segment operating EBITDA. Failure signal: If RNG production disappoints or recycling margins compress due to commodity price declines.
Also in play: $CAT $DE $CARR $IR $TEX $CMC