WM Stock Today, December 24: Earnings Miss, Dividend Hike, Buybacks Ahead
Waste Management stock (WM) is steady after a slight earnings miss tied to healthcare integration, even as core margins, EBITDA, and free cash flow improved. Shares trade near $221.28 with a 34.7x P/E, close to a 35.4x fair multiple. Management lifted the dividend by 14.5% and outlined a $3 billion buyback for 2026, signaling confidence in cash generation. With resistance in the mid-$230s and the 50-week average nearby, the next move hinges on execution, Stericycle integration progress, and a clean break above key technical lines.
Earnings, Margins, and Cash Flow
Results came in just below expectations, weighed by healthcare unit integration. Even so, operating metrics improved: operating margin sits near 17.6%, net margin near 10.4%, and EBIT growth was strong year over year. Operating cash flow per share is $14.53 and free cash flow per share is $5.96, supporting ongoing investment and shareholder returns without straining the balance sheet.
The earnings miss was small, and quality of earnings looked solid with cash conversion improving. Management kept focus on pricing, route density, and cost control, which supported EBITDA. For long-term holders of Waste Management stock, consistent free cash flow and stable margins typically matter more than a single-quarter variance, especially during an active integration phase in healthcare services.
Dividend Hike and 2026 Buybacks
The dividend rose 14.5%, taking the payout to $3.30 per share TTM, or about a 1.5% yield at current prices. The payout ratio near 50.8% looks reasonable given the business’s recurring cash flow. Interest coverage is ~4.9x and net debt to EBITDA is ~3.35x, levels to watch but manageable if cash generation continues to improve.
Management plans a $3 billion repurchase in 2026, which could lift EPS and offset dilution. Share count already trended lower (diluted shares down ~0.86% year over year). For investors in Waste Management stock, this sets a clear path for total return combining dividend growth with buybacks, provided leverage stays in check and integration moves on schedule.
Valuation Setup and Analyst View
At $221.28, shares trade around 34.7x EPS and roughly 16.1x EV/EBITDA. That sits just under a 35.4x fair multiple referenced by recent analysis. With durable cash flow and secular landfill advantages, the premium is familiar to the story. Still, upside depends on delivery against 2026 cash return plans and smoother Stericycle integration source.
Analysts lean positive: 16 Buy, 4 Hold, no Sells. The consensus target is about $253.7 (median $256; high $264), implying mid-teens upside if execution improves. The next earnings date is January 28, 2026. Recent coverage flags a new phase for Waste Management stock as capital returns ramp source.
Technical Levels to Watch
Price is near the upper Bollinger Band ($222.29) with RSI at 60.9 and a positive MACD histogram (0.47). ADX at 18.5 shows no strong trend, consistent with consolidation. The 50-day average is $211.31 and the 200-day is $223.69. Waste Management stock likely needs stronger breadth before a fresh swing higher.
Traders are eyeing resistance in the mid-$230s and a push above the 50-week average for confirmation. A firm close over the 200-day ($223.69) would help bulls. Initial support sits around the mid-$210s, near the 50-day and Bollinger middle band ($215.68). A weekly close under $211 would weaken the setup.
Final Thoughts
Here is our bottom line: the setup is balanced but constructive. The slight earnings miss stems from healthcare integration, yet margins, EBITDA, and free cash flow are moving the right way. Management just raised the dividend by 14.5% and set a $3 billion buyback plan for 2026, which can drive total return. Valuation near 34.7x is close to a 35.4x fair multiple, so future gains depend on execution. For a measured plan, many investors will watch Stericycle integration milestones, leverage, and cash conversion. On the chart, a sustained move over the 200-day and the mid-$230s could reset momentum. Waste Management stock remains a quality compounder for long-term portfolios.
FAQs
The company posted a slight earnings miss tied to healthcare operations and Stericycle integration friction. Still, operating and net margins remain healthy, and cash generation improved year over year. We think investors are waiting for clearer integration milestones and for price to reclaim key moving averages before re-rating.
The dividend sits at $3.30 TTM with a ~1.5% yield and a payout ratio near 51%. Interest coverage is about 4.9x and net debt to EBITDA near 3.35x. Those levels are watch items, but recurring cash flows and planned capital returns suggest the new dividend is supported barring a sharp downturn.
Price is near $221 with the 200-day around $223.69. The upper Bollinger Band is $222.29, RSI is 60.9, and ADX indicates no strong trend. Resistance remains in the mid-$230s, while support sits around $215 to $211. A weekly close above the 200-day would help confirm upside.
A $3 billion program in 2026 can reduce the share count and lift EPS, especially if paired with steady margin performance. Shares already trended slightly lower year over year. The impact depends on purchase prices, free cash flow delivery, and keeping leverage within targeted ranges.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
