WM
Waste Management, Inc.
$217.90
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 31.5% above fair value
You pay
$217.90
Bear
$132.62
Fair
$165.76
Bull
$198.92
Bear
$132.62
-39.1%
$7.44 × 14x P/E
Fair
$165.76
-23.9%
$7.44 × 17x P/E
Bull
$198.92
-8.7%
$7.44 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
29.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $258.00 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $165.76 per share.
Warnings
Dividend-based valuation: $1053.91 (above our primary estimate by 735%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $258.00 (from 35 analysts). Our estimate is 51% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples