WM
Waste Management, Inc.
$239.20
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 45.4% above fair value
You pay
$239.20
Bear
$131.66
Fair
$164.56
Bull
$197.48
Bear
$131.66
-45.0%
$7.44 × 14x P/E
Fair
$164.56
-31.2%
$7.44 × 17x P/E
Bull
$197.48
-17.4%
$7.44 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
32.1x
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 $254.00 from 35 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $164.56 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 $254.00 (from 35 analysts). Our estimate is 50% 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