Goldman Sachs Initiates Waste Management at Buy, Sets $256 Price Target

Core Viewpoint - Goldman Sachs initiated coverage on Waste Management (NYSE: WM) with a Buy rating and a price target of $256 [1] Group 1: Growth Outlook - Analysts forecast a 7.7% EBITDA CAGR from 2025 to 2027, driven by strong price/cost execution, high-return recycling and landfill-gas investments, and continued synergy capture from the Stericycle acquisition [2] - Potential upside is linked to improving volumes in Healthcare Solutions (Stericycle) and a recovery in recycled commodity pricing [2] Group 2: Competitive Position - Waste Management holds a dominant competitive position with an estimated 51% market share within a 50-mile radius of its local landfill operations, the highest among major public peers [3] - Despite concerns regarding Stericycle integration, the stock has underperformed compared to RSG, GFL, and WCN by 20% since the acquisition, even though Stericycle accounts for only about 6% of EBITDA [3] Group 3: Valuation - Waste Management trades at a 10% valuation discount to peers, despite expectations for faster organic EBITDA growth, reduced commodity volatility, and comparable free-cash-flow conversion [4]