Waste Management (NYSE: WM) was upgraded to Buy from Neutral by UBS, which raised its price target to $260 from $225. Shares gained more than 1% intraday on Friday.
The firm said it expected Waste Management’s resumption of share repurchases, which had been suspended since the first quarter of 2024, to drive roughly a 2.5-times increase in capital returned to shareholders and to support a valuation re-rating in 2026.
UBS noted that the company had completed major growth investments, successfully integrated Stericycle into its WM Healthcare Solutions business, and reduced leverage to 3.0x from 3.6x in the fourth quarter of 2024. These actions were expected to set the stage for more than 30% year-over-year growth in free cash flow in 2026.
The firm added that following prior investment cycles, Waste Management’s relative valuation had expanded by as much as 20%. While UBS said its earnings estimates were broadly in line with consensus, it expected investor preference to shift toward companies emphasizing capital returns over continued investment in municipal solid waste, supporting a re-rating of the stock.
