WM Q3 deep dive: margin expansion and healthcare integration offset volume headwinds

Waste Management opened a $200M renewable natural gas plant at its Twin Creeks landfill in Warwick Township. The facility processes up to 8,000 standard cubic feet of landfill gas per minute and can produce enough gas to heat 35,000 homes annually. The project is part of Waste Management's broader renewable energy strategy, with plans to expand operations and staff. The company is also seeking approval for a landfill expansion at the site.

Public waste companies spent $1.2B on M&A in Q3, led by GFL Environmental's $762.1M acquisition of Secure Waste Infrastructure. WM, Republic Services, Waste Connections, and Casella Waste Systems also reported deals. Executives remain optimistic about future M&A opportunities.

Waste Management (WM) reported a 20.71% year-over-year increase in free cash flow to $985M in Q3 2026, covering its dividend by 2.6 times. The company allocated 90% of free cash flow to shareholder returns, including $1.58B in share repurchases and $1.14B in dividends. WM's pricing power and leverage within its target range support its dividend growth streak since 2009, though volume declines pose a risk.

Waste Management Inc (WM) reported Q3 2026 earnings, noting modest volume declines in residential and commercial segments, higher fuel costs, and increased risk management expenses. CEO John Morris emphasized strategic priorities including shareholder returns, M&A, and healthcare integration. CFO David Reed highlighted strong free cash flow and expected Q4 margins to improve sequentially despite fuel headwinds.

TD Cowen reiterated a Buy rating and $275 price target on Waste Management (WM), citing long-term potential despite near-term margin headwinds. The company's Q3 2026 revenue beat estimates but adjusted EBITDA missed slightly. Analysts have mixed views on its price target, with some citing margin pressures and others highlighting sustainable projects. WM has raised its dividend for 22 consecutive years, yielding 1.68%.

Oppenheimer reiterated an Outperform rating and $263 price target for Waste Management (NYSE:WM) after Q3 results. Shares fell as adjusted EBITDA missed estimates, though revenue beat. The company adjusted guidance, citing margin headwinds. Analysts see 13% upside potential. Waste Management trades at a P/E of 31.91, with some analysts suggesting overvaluation. Jefferies lowered its target to $267, citing margin pressures.