On Monday, Waste Management (NYSE:WM) stock maintained its Market Perform rating with a steady price target of $212.00, as noted by a BMO Capital Markets analyst.
The company is poised to fund an upcoming deal through a combination of bank debt and senior notes, which is anticipated to increase its financial leverage to approximately 3.4 times. This figure is just above Waste Management's preferred range of 2.75 to 3 times.
The analyst reported that the increase in leverage is considered manageable and that the company's management expects to bring it back within the targeted range within the next 18 months.
This reversion to the target leverage is planned to be partly facilitated by a temporary halt in share repurchases by the company.
Waste Management's strategy to manage its leverage includes potential moves that have been discussed in recent media reports. One such move could be the monetization of its landfill gas portfolio, a step that could significantly reduce the current financial strain.
The company's financial strategies, including the suspension of share buybacks and possible asset monetization, are designed to maintain financial stability and manage debt levels post-deal.
Waste Management's approach reflects its commitment to maintaining a balanced financial profile while pursuing growth opportunities.
InvestingPro Insights
As Waste Management (NYSE:WM) navigates its financial strategies to manage leverage and growth, insights from InvestingPro shed light on its market position and performance metrics. With a robust market capitalization of $84.57 billion, the company demonstrates significant industry presence. Analysts have taken a positive outlook on the company's earnings, with 13 analysts revising their earnings upwards for the upcoming period, signaling confidence in Waste Management's financial prospects.
The company's commitment to shareholder returns is evident, as it has raised its dividend for an impressive 20 consecutive years, and maintained dividend payments for 27 consecutive years, showcasing a consistent return to investors. The current dividend yield stands at 1.42%, with a growth of 7.14% in the last twelve months as of Q1 2024. InvestingPro Tips also highlight Waste Management's stature as a prominent player in the Commercial Services & Supplies industry, further reinforcing the company's market dominance.
Investors considering Waste Management's stock should note that it is trading near its 52-week high, at 98.22% of the peak, and exhibits low price volatility, which might appeal to those seeking stability in their investments. For more detailed analysis and additional InvestingPro Tips, interested parties can explore the company's profile on InvestingPro, where they'll find a comprehensive array of 15 additional tips to inform their investment decisions. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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