Waste Management Outlook - Technical Pressure and Mixed Analyst Signals

1. Market Snapshot

Takeaway: The stock of Waste Management is facing technical headwinds, with an internal diagnostic score of 3.15, and recent price action has dropped -3.60%, suggesting caution for short-term buyers.

2. News Highlights

Recent news may indirectly impact the energy and materials sectors, which could affect Waste Management's operations:

• May 31, 2025 - Trump Fast-Tracked Utah Uranium Mine: The reinvigoration of the uranium sector under the Trump administration could impact industrial waste management, particularly in the West. This could either boost or strain demand for Waste Management services.
• May 31, 2025 - China’s Factory Activity Contracts: China’s Purchasing Managers Index (PMI) fell to 49.5, indicating a contraction in factory activity, which might slow global demand for industrial goods. This could indirectly impact Waste Management’s revenue if U.S. manufacturing slows in response.
• May 30, 2025 - U.S. May Tighten Export Rules on EDA Software: The U.S. is reportedly moving to tighten export rules for software automation companies, including firms like Cadence and Synopsys. This could have a ripple effect on manufacturing and tech sectors, which could influence Waste Management’s client base.

3. Analyst Views & Fundamentals

Analyst Consensus:

• Average Rating Score (Simple Mean): 3.80
• Weighted Rating Score (Performance-Weighted): 5.34
• Rating Consistency: Analysts are split, with recent ratings showing a mix of 'Buy', 'Strong Buy', and 'Neutral' (see distribution: Strong Buy 1, Buy 2, Neutral 2).
• Price Trend vs. Analyst Sentiment: Analysts appear optimistic, but the stock is currently falling, indicating a mismatch between market expectations and short-term price action.

Key Fundamental Factors and Model Scores:

• EV/EBIT: 108.51 (Score: 1) - This is a key valuation metric and currently signals weak performance.
• ROA (Return on Assets): 1.59% (Score: 3) - Indicates average asset efficiency.
• ROE (Return on Equity): 7.90% (Score: 3) - Reflects a solid return on equity.
• Gross Profit Margin (GPM): 40.30% (Score: 3) - A high margin, indicating strong profitability.
• Net Income to Revenue: 21.92% (Score: 3) - Shows a healthy net income margin.
• Long-Term Debt to Working Capital Ratio: 7.09% (Score: 4) - A relatively low ratio indicates strong liquidity.
• Interest Coverage Ratio: 4.6983 (Score: 3) - Suggests a moderate ability to cover interest obligations.
• Diluted Earnings per Share (YoY Growth Rate): -2.03% (Score: 2) - Indicates a decline in earnings growth.
• Cash to Market Cap (Cash-MV): 4.79% (Score: 3) - Shows a moderate amount of cash relative to market value.
• Overall Fundamental Score: 6.56 (Score: 4) - Suggests a solid, though not exceptional, fundamental outlook.

4. Money-Flow Trends

Big money is flowing out of Waste Management, with an internal diagnostic score of 7.76 (a "good" rating for fund flow). The overall inflow ratio is 45.97%, and all size categories from small to extra-large have negative trends. This suggests that both institutional and retail investors are cautious, with a strong bearish bias from large to extra-large capital flows.

5. Key Technical Signals

Recent Technical Signals:

• Williams %R (WR) Oversold: Score of 3.3 (internal diagnostic score) - A neutral rise signal from this indicator, indicating some strength in the oversold condition, but not a strong reversal sign.
• Marubozu White: Score of 2.99 (internal diagnostic score) - Another neutral rise signal, with mixed historical performance, particularly low win rate of 46.15%.
• Recent Chart Patterns: The WR Oversold signal has appeared repeatedly (on May 3, 5, and 8), suggesting a pattern of attempted bounces but not a clear reversal in momentum.
• Overall Momentum: The technical outlook is weak, with 2 bearish indicators and no bullish ones, reinforcing the suggestion to avoid entry at this point.

6. Conclusion

Waste Management is currently facing a challenging technical landscape, with bearish signals dominating and a weak internal diagnostic score of 3.15. While the fundamentals remain relatively strong (6.56), and money flows are mixed with a good fund-flow score of 7.76, the overall market sentiment is weak. Analysts are optimistic but their ratings are not aligned with the stock’s falling price. Given the current momentum and mixed signals, consider waiting for a clearer technical setup before entering. Investors may also want to watch for any upcoming earnings or regulatory news that might shift the balance in favor of a turnaround.