Core Insights - Waste Management (NYSE: WM) is experiencing strong demand for its services, driven by solid economic activity and high consumption, which translates into profitable business growth [2] - The company is on track for inclusion in the Dividend Aristocrats, having increased its dividend for 23 consecutive years, with a target of reaching 25 years by 2028 [3] - Despite missing Q4 2025 analyst estimates, Waste Management reported a 7.1% revenue growth and margin expansion, aligning with long-term trends that support its stock price [5] Financial Performance - Q4 results highlighted a 14% increase in dividends and an intention to resume share buybacks, which were previously suspended to focus on debt reduction [4] - The company anticipates $2 billion in buybacks for the year, representing over 2% of its market cap, which will help offset the dilutive effects of share-based compensation [4] - Free cash flow is expected to accelerate, supporting both dividend growth and the planned return to share repurchases [5] Market Position - The stock remains in an uptrend following a post-earnings pullback, with buyers likely to defend key moving-average support [5] - The balance sheet shows increased assets, reduced debt and liabilities, and a 20% increase in equity projected by the end of 2025 [4]

Core Insights - Waste Management, Inc. (WM) is a leading provider of waste management services in North America, offering collection, transfer, recycling, and disposal services [1] - Oppenheimer has set a price target of $264 for WM, indicating a potential price increase of 18.32% from its current price of $223.13 [1][5] - AlphaQuest LLC has increased its investment in WM by 131.8%, reflecting strong confidence in the company's future performance [2][5] Market Performance - WM's current stock price is $223.13, which represents a decrease of 3.66% or $8.47, with fluctuations during the trading day ranging from a low of $220.84 to a high of $231.67 [3] - Over the past year, WM's stock has reached a high of $242.58 and a low of $194.11, indicating volatility in the stock market [3] - WM's market capitalization is approximately $89.89 billion, showcasing its significant presence in the waste management industry [4][5] Investor Interest - The trading volume on the NYSE for WM is 3,670,753 shares, indicating active investor interest [4] - Other investment firms, such as Cornercap Investment Counsel Inc. and Wealthfront Advisers LLC, have also adjusted their positions in WM, reflecting broader interest in the company's potential [2]

Market Overview - The Solid Control Drilling Waste Management Market was valued at USD 1.50 billion in 2025 and is projected to reach USD 3.23 billion by 2035, growing at a CAGR of 8.06% from 2026 to 2035 [1][5]. Market Drivers - The increase in global oil and gas drilling activities is driving the demand for effective solid control and waste management systems due to the significant amount of drilling waste produced [1]. - Companies are focusing on implementing advanced separation technology and treatment solutions to manage contaminated drilling fluids and materials safely [1]. - Environmental protection regulations are encouraging operators to adopt eco-friendly disposal methods, further boosting market demand [1]. Key Market Segmentation By Waste Type - Contaminated Oil Based Muds held a dominant market share of approximately 58% in 2025, attributed to the large volume of hazardous muds generated from oil and gas drilling operations [6]. - The Waste Lubricants segment is expected to grow at the fastest CAGR from 2026 to 2035 due to increasing drilling operations and stricter environmental regulations [6]. By Application - The Onshore segment dominated the market with around 61% share in 2025, driven by the high number of land-based drilling projects [7]. - The Offshore segment is anticipated to grow at the fastest CAGR from 2026 to 2035, fueled by increasing deepwater and offshore oil and gas exploration activities [7]. By End-Use - The Oil & Gas sector accounted for approximately 69% of the market share in 2025, due to extensive use of drilling fluids and high-volume waste generation [8]. - The Geothermal Energy segment is projected to grow at the fastest CAGR from 2026 to 2035, driven by a rising focus on renewable energy and increasing geothermal drilling projects [8]. By Service Type - Solid Control services represented about 41% of the market in 2025, as they are essential for separating solids from drilling fluids [9]. - The Waste Treatment & Disposal segment is expected to experience the fastest growth from 2026 to 2035, driven by increasing environmental regulations and sustainability initiatives [9]. Regional Insights - North America led the market with a revenue share of approximately 38% in 2025, due to extensive oil and gas drilling activities in the U.S. and Canada [11]. - The Asia Pacific region is expected to grow at the fastest CAGR of about 9.39% from 2026 to 2035, driven by rising oil and gas exploration activities and growing investments in drilling infrastructure [11]. Competitive Landscape - Key players in the market include Schlumberger, Halliburton, Baker Hughes, Weatherford International, and others [4]. - Recent developments include TWMA securing a $15 million drilling waste management contract for BP's Mediterranean project and Schlumberger partnering with Cactus Drilling to optimize drilling operations [15].

Core Insights - WM reported disappointing fourth-quarter 2025 results, with adjusted earnings of $1.93 per share missing the consensus estimate by 1% and total revenues of $6.3 billion also falling short by 1.2% while showing a year-over-year increase of 7.1% [1][8] Financial Performance - The Collection segment generated revenues of $3.9 billion, a 4.9% increase year-over-year, meeting the Zacks Consensus Estimate [2] - The Landfill segment reported revenues of $910 million, a 6.2% year-over-year increase, but missed the consensus estimate of $956.1 million [2] - The Transfer segment's revenues grew 6.1% to $381 million, surpassing the consensus mark of $375.1 million [2] - The Recycling Processing and Sales segment saw revenues decline by 10.8% to $355 million, missing the Zacks Consensus Estimate of $414.3 million [2] - WM Renewable Energy achieved revenues of $157 million, a significant 68.8% increase year-over-year, exceeding the consensus mark of $148 million [3] - The combined revenues from WM Healthcare Solutions and Corporate and Other segments totaled $621 million, reflecting a 52.2% year-over-year growth but missing the consensus estimate of $627 million [3] - Adjusted operating EBITDA was $2 billion, up 15.7% from the previous year, with an adjusted operating EBITDA margin increasing by 240 basis points to 31.3% [4] Cash Flow and Dividends - WM generated $1.7 billion in cash from operating activities in Q4 2025, with capital expenditures of $684 million and free cash flow of $823 million [5] - The company distributed $333 million in cash dividends to shareholders during the fourth quarter [5] 2026 Outlook - For 2026, WM expects revenues between $26.43 billion and $26.63 billion, with the midpoint of $26.53 billion being lower than the Zacks Consensus Estimate of $26.59 billion [6] - Adjusted operating EBITDA is projected to be between $8.15 billion and $8.25 billion [6] - WM currently holds a Zacks Rank 3 (Hold) [6]

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Financial Data and Key Metrics Changes - The company reported a record performance in operating expenses as a percentage of revenue, with Operating EBITDA margin increasing by 150 basis points in the legacy business [8] - Full-year cash flow from operations grew by double digits, and free cash flow increased by nearly 27% [8][12] - Operating EBITDA margin expanded by 40 basis points to 30.1% for the full year, overcoming a 140 basis point margin headwind from the acquisition of the Healthcare Solutions business [22] Business Line Data and Key Metrics Changes - The collection and disposal business saw Operating EBITDA growth of more than 8% in Q4, with a margin expansion of 160 basis points [15] - The Healthcare Solutions business improved service delivery metrics and customer service scores, with SG&A expenses for this segment decreasing to 20.8% of revenue in Q4, a 350 basis point improvement from the prior year [24] Market Data and Key Metrics Changes - The company experienced notable growth in special waste, renewable energy, and recycling, while residential collection volume showed signs of improvement [21] - The pricing environment remained healthy, with core price growth of 6.2% in Q4 [20] Company Strategy and Development Direction - The company plans to focus on growing its core business, maximizing returns from recycling and renewable energy investments, and driving growth in healthcare solutions [13] - A new $3 billion share repurchase program was authorized, alongside a 14.5% increase in the planned quarterly dividend rate for 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, noting signs of recovery in the industrial line of business and expectations for steady residential volume improvement [31][35] - The company anticipates Operating EBITDA growth of 6.2% at the midpoint for 2026, with free cash flow expected to grow nearly 30% [12][27] Other Important Information - The company completed automation upgrades at five recycling facilities and added facilities in four new markets, enhancing the performance of its recycling network [11] - The company expects to return about $3.5 billion to shareholders through dividends and share repurchases in 2026, representing over 90% of expected free cash flow [13] Q&A Session Summary Question: Can you provide perspective on the top-line guidance and the macro backdrop? - Management remains cautiously optimistic about the macroeconomy, noting a recovery in the industrial line of business and signs of improvement in residential volumes [31][32] Question: Can you discuss the integration of the Healthcare Solutions business and pricing initiatives? - Significant progress has been made in customer service metrics, with expectations for better price realization in 2026 as the integration continues [37][39] Question: What is the outlook for 2026 in terms of healthcare solutions and cost synergies? - The company expects 4.2% price growth and 3% top-line growth in healthcare solutions, with ongoing efforts to reduce SG&A expenses [39][85] Question: Can you clarify the decision regarding 2027 financial targets? - Management indicated that detailed guidance for 2027 will be provided a year from now, emphasizing the difficulty of predicting long-term performance [46][47] Question: What is the expected margin expansion in the collection and disposal business for 2026? - The target for margin improvement across the portfolio is approximately 50 basis points on a same-store sales basis [49]

Financial Data and Key Metrics Changes - The company reported a record performance in operating expenses as a percentage of revenue, with Operating EBITDA margin increasing by 150 basis points in the legacy business [8][12] - Full-year Operating EBITDA margin reached 30.1%, despite a 140 basis point headwind from the acquisition of the Healthcare Solutions business and the expiration of alternative fuel tax credits [22][24] - Cash flow from operations grew more than 12% to $6.04 billion, and free cash flow increased by nearly 27% to $2.94 billion [24][28] Business Line Data and Key Metrics Changes - The Collection and Disposal business saw Operating EBITDA growth of over 8% in Q4, with a margin expansion of 160 basis points [15][21] - The Recycling segment delivered over 22% Operating EBITDA growth, despite nearly 20% lower commodity prices [11][24] - The Healthcare Solutions business improved its SG&A expenses to 20.8% of revenue in Q4, a notable improvement of 350 basis points from the prior year [24] Market Data and Key Metrics Changes - The company observed a bounce back in the industrial line of business, which had been down 3% to 4% in volume for several quarters, now nearing flat [31][32] - Residential collection volume is expected to improve steadily as the company moves through 2026 [21][32] - The landfill line of business has been a source of strength, with special waste performing well [35] Company Strategy and Development Direction - The company plans to focus on growing the core business by leveraging customer lifetime value, operational excellence, and network advantages [13] - There is a commitment to capturing returns from investments in Recycling and Renewable Energy businesses, as well as driving growth in healthcare solutions [13][28] - The company has authorized a new $3 billion share repurchase program and plans to return about $3.5 billion to shareholders through dividends and share repurchases in 2026 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, indicating a firm footing for the economy [31][35] - The company expects continued strong growth in 2026, with guidance for Operating EBITDA growth of 6.2% at the midpoint [12][26] - The company anticipates free cash flow growth of nearly 30% in 2026, reflecting structural earnings strength [12][27] Other Important Information - The company has made significant progress in integrating the Healthcare Solutions business, with improved customer service metrics now exceeding those of the legacy business [10][37] - The company is focused on reducing SG&A expenses across all business lines, aiming to bring total company SG&A below 10% [24][56] Q&A Session Summary Question: Insights on top-line guidance and industrial activity - Management remains cautiously optimistic about the macroeconomic environment, noting a bounce back in the industrial line of business [31][32] Question: Pricing and cost refinement in Healthcare Solutions - Management highlighted significant progress in customer service and expects better price realization in 2026, with a projected 4.2% price increase [39][41] Question: Discussion on 2027 financial targets - Management clarified that 2027 estimates were not detailed guidance and emphasized the difficulty in predicting long-term performance [46][47] Question: Margin expansion expectations for Collection and Disposal - Management targets a 50 basis point margin improvement on a same-store sales basis across the portfolio [49] Question: Outlook for Healthcare Solutions EBITDA and cost synergies - Management reported exceeding synergy goals for 2025 and expects continued benefits in 2026 [53][54]

Financial Data and Key Metrics Changes - The company reported a record performance in operating expenses as a percentage of revenue, with Operating EBITDA margin increasing by 150 basis points in the legacy business for the full year [6][20] - Cash flow from operations grew by double digits, reaching $6.04 billion, while free cash flow increased by nearly 27% to $2.94 billion [6][24] - Operating EBITDA margin for the full year expanded by 40 basis points to 30.1%, overcoming a 140 basis point headwind from the acquisition of the Healthcare Solutions business [20][24] Business Line Data and Key Metrics Changes - The collection and disposal business saw Operating EBITDA growth of more than 8% in Q4, with a margin expansion of 160 basis points [14] - The Healthcare Solutions segment improved service delivery metrics and customer satisfaction, with SG&A expenses decreasing to 20.8% of revenue in Q4, a 350 basis point improvement from the prior year [23][9] - The recycling segment delivered over 22% Operating EBITDA growth despite nearly 20% lower commodity prices [10] Market Data and Key Metrics Changes - The company experienced notable growth in special waste, renewable energy, and recycling volumes in 2025, while residential collection volumes showed signs of improvement [19] - The industrial line of business, which had been soft, showed signs of recovery, bouncing back to nearly flat volumes [31] - The landfill business remained a source of strength, contributing positively to overall performance [34] Company Strategy and Development Direction - The company plans to focus on growing its core business by leveraging customer lifetime value, operational excellence, and network advantages [12] - Strategic investments in sustainability include commissioning 7 new renewable natural gas facilities and upgrading recycling facilities, enhancing performance and creating new customer opportunities [10] - The company aims to balance shareholder returns with disciplined reinvestment and tuck-in M&A, targeting a leverage ratio between 2.5 and 3 times by 2026 [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment, noting improvements in various business lines and a positive outlook for 2026 [31][34] - The company expects Operating EBITDA growth of 6.2% at the midpoint for 2026, with free cash flow projected to grow nearly 30% [11][26] - Management highlighted the importance of operational excellence and strategic investments in driving long-term shareholder value [12][27] Other Important Information - The board approved a 14.5% increase in the planned quarterly dividend rate for 2026, marking the 23rd consecutive year of dividend growth [11] - The company authorized a new $3 billion share repurchase program, planning to return about $3.5 billion to shareholders through dividends and repurchases in 2026 [12] Q&A Session Summary Question: Can you provide perspective on the macro backdrop and industrial activity? - Management remains optimistic about the macroeconomy, noting a recovery in the industrial line of business and improvements in residential volumes [31][34] Question: What are the expectations for pricing and cost refinement in the Healthcare Solutions segment? - Management indicated progress in customer service and expects better price realization in 2026, with a projected 4.2% price increase [36][38] Question: Can you clarify the decision to hold off on 2027 financial targets? - Management stated that 2027 estimates were not detailed guidance and emphasized the consistency of performance as a strength [45][46] Question: What level of margin expansion is expected in the collection and disposal business for 2026? - Management targets a 50 basis point margin improvement on a same-store sales basis across the portfolio [49] Question: How much cost synergy capture was realized in 2025, and what is expected for 2026? - Management reported exceeding synergy goals in 2025 and anticipates continued benefits in 2026, particularly in SG&A expenses [55][58]

Core Insights - Waste Management (WM) reported revenue of $6.31 billion for the quarter ended December 2025, reflecting a year-over-year increase of 7.1% [1] - The earnings per share (EPS) for the quarter was $1.93, up from $1.70 in the same quarter last year [1] - Revenue fell short of the Zacks Consensus Estimate of $6.39 billion, resulting in a surprise of -1.21% [1] - The EPS also missed the consensus estimate of $1.95, with a surprise of -1.03% [1] Financial Performance Metrics - Internal Revenue Growth for the total company was 7.1%, compared to an average estimate of 8.1% from six analysts [4] - Volume growth as a percentage of total company revenue was 0.7%, exceeding the four-analyst average estimate of 0.1% [4] - Internal revenue growth was reported at 3.1%, surpassing the four-analyst average estimate of 2.5% [4] - Growth from acquisitions was 4.3%, below the average estimate of 6.1% from three analysts [4] - Divestitures showed a change of -0.3%, compared to an average estimate of 0% [4] - Total average yield was 2.3%, higher than the three-analyst average estimate of 1.8% [4] Segment Performance - WM Healthcare Solutions reported net operating revenues of $615 million, slightly below the four-analyst average estimate of $615.55 million [4] - WM Renewable Energy achieved net operating revenues of $157 million, exceeding the average estimate of $149.45 million and representing a significant year-over-year increase of 68.8% [4] - Recycling Processing and Sales generated net operating revenues of $355 million, falling short of the average estimate of $360.11 million and reflecting a year-over-year decline of 10.8% [4] - Corporate and Other segments reported net operating revenues of $6 million, surpassing the average estimate of $5.18 million and showing a year-over-year increase of 20% [4] Stock Performance - Shares of Waste Management have returned +4.2% over the past month, outperforming the Zacks S&P 500 composite's +0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Waste Management reported quarterly earnings of $1.93 per share, missing the Zacks Consensus Estimate of $1.95 per share, representing an earnings surprise of -1.03% [1]. Financial Performance - The company posted revenues of $6.31 billion for the quarter ended December 2025, missing the Zacks Consensus Estimate by 1.21%, compared to year-ago revenues of $5.89 billion [2]. - Over the last four quarters, Waste Management has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2]. Stock Performance - Waste Management shares have increased by approximately 5.3% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3]. - The current consensus EPS estimate for the upcoming quarter is $1.79 on revenues of $6.31 billion, and for the current fiscal year, it is $8.27 on revenues of $26.59 billion [7]. Industry Outlook - The Waste Removal Services industry is currently ranked in the bottom 38% of over 250 Zacks industries, indicating potential challenges ahead [8]. - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Waste Management's stock performance [5].