WM
Waste Management, Inc.
$229.60
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 102.0% above fair value
You pay
$229.60
Bear
$90.92
Fair
$113.65
Bull
$136.38
Bear
$90.92
-60.4%
$6.70 × 14x P/E
Fair
$113.65
-50.5%
$6.70 × 17x P/E
Bull
$136.38
-40.6%
$6.70 × 20x P/E
Adjust Assumptions
17.0x
6.7$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
34.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (35 analysts)
$225.00
Divergence from AlphaVal
49%
Summary
Applying a 17x P/E to adjusted EPS of $6.70, the base-case value is $113.65 per share. DDM cross-check: $1345.43.
Warnings
Dividend-based valuation: $1345.43 (above our primary estimate by 1084%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $225.00 (from 35 analysts). Our estimate is 49% 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