Waste Management Looks Set Up for a Cleaner Growth Run as Volumes Normalize

Waste stocks are supposed to be boring. WM hasn’t gotten that memo.

Waste Management has quietly pushed back toward the top end of its 52-week range, with the stock closing around $231 and flirting with levels it hasn’t sustainably held since last year’s peak near $242. The interesting part is not the chart by itself. It’s the mix underneath it: pricing that’s still working, margin discipline that has been holding up, and a plausible path for growth to re-accelerate as the volume backdrop normalizes.

My stance is straightforward: WM is setting up for a growth inflection as volume headwinds fade, while pricing stays strong enough to keep earnings power compounding. This is not a deep value story. At roughly 36x earnings, you’re paying for quality. The trade works if the market continues to reward reliability, and if operational execution stays tight as the business digests healthcare waste integration and keeps recycling volatility from bleeding into consolidated results.

Let’s walk through what matters, what could break, and how I’d structure the trade.

What WM does (and why the market cares)

Waste Management is the kind of company that looks simple from 10,000 feet: it picks up trash, hauls it, processes it, and disposes of it. In practice, it’s a scaled environmental services platform with multiple earnings levers. The company operates across collection and disposal in regional tiers, recycling processing and commodity sales, renewable energy from landfill gas projects, and healthcare solutions (medical waste).

Why the market cares is also simple: this is a business with inelastic demand, local density advantages, and steady cash flow that tends to hold up when the economy gets noisy. In a market that swings between “growth at any price” and “hide in cash flows,” WM usually ends up being a name institutions are comfortable owning.

And right now, it’s not just a defensive hold. There’s a credible argument that the growth profile improves from here as volume comparisons ease and pricing stays firm.

The numbers that shape the setup

First, the market is paying a premium. WM’s market cap is about $93.2B. On conventional multiples, it’s not cheap:

Premium valuation is the toll you pay for premium consistency. The key question is whether you’re buying into a decelerating compounding machine or one that’s about to re-accelerate.

Recent commentary around the Stericycle digestion has been “margins holding, growth pausing.” That sounds like a stock that drifts. But there are two important offsets:

• Pricing power is still a real thing here. Waste collection and disposal can be contract-driven and sticky, and WM tends to have the density and asset footprint to defend price.
• Capital return is not theoretical. WM authorized a $3B buyback program and increased its dividend by 14.5% for 2026, which matters when the stock is already priced like a quality compounder.

From a trading perspective, the tape is also cooperating. WM’s RSI is ~71.6, which is hot, but not automatically bearish if the name is in a steady institutional bid. More importantly, price is above key averages: the 10-day SMA is ~$224.37, the 20-day is ~$221.90, and the 50-day is ~$217.76. The MACD read is bullish momentum. That’s the kind of trend profile you want if you’re leaning into a “grind higher” thesis rather than a mean-reversion bet.

Why I think the growth inflection is plausible

The simplest version: volume headwinds eventually cycle. Waste volumes can soften when industrial activity slows or construction eases. When those comps get easier, the underlying pricing and route density show up more clearly in reported growth. WM’s model is built to monetize that shift.

At the same time, the company is not just a one-line trash hauler anymore. It has levers in renewable energy projects and healthcare solutions. That last piece is messy in the near term (integration, systems, pricing timing), but strategically it expands WM’s addressable market and can diversify revenue streams away from purely municipal/commercial collection cadence.

A balanced way to say it: the market has been willing to look through the “pause” as long as pricing and margins don’t crack. If volumes stop being a drag, the narrative improves quickly.

Valuation framing (and what the market is really paying for)

At ~36x earnings and ~16.3x EV/EBITDA, WM is being valued like a high-quality infrastructure-like compounder, not like a cyclical industrial. That’s not new, but it does create a clear bar:

• If growth stays sluggish and integration remains choppy, multiple compression is the obvious risk.
• If growth re-accelerates even modestly, the market usually doesn’t rush to de-rate a name like WM, especially with a shareholder-friendly capital return plan.

I don’t think you buy WM because it’s cheap. You buy it because you think the “steady + improving” profile gets rewarded, and because the downside often looks more like a pullback to moving averages than a full air pocket, assuming the broader tape stays constructive.

Catalysts (what could move the stock over the next 1-2 months)

• Continued price momentum toward the prior high. The 52-week high is $242.58. Markets remember those levels, and WM is close enough that a mild risk-on bid can do the rest.
• Buyback execution. A $3B authorization provides a structural bid, particularly on red days when liquidity shows up.
• Sentiment support from “defensive dividend compounder” positioning. Recent coverage has leaned positive on the stock’s defensive qualities and dividend growth history, which can matter when allocators shift factor exposure.
• Improving read-through on healthcare solutions integration. If operational friction (pricing delays/ERP issues) starts to fade, the market may re-rate the integration risk downward.

The trade plan

This is a mid term (45 trading days) continuation idea. I’m not trying to nail the exact top tick or front-run a breakout by pennies. I want exposure to the trend with a stop that respects the moving-average structure.

• Direction: Long
• Entry: $231.40
• Target: $242.50
• Stop loss: $223.90
• Time horizon: mid term (45 trading days). The logic is that WM typically moves in steady legs, and a push toward the prior high can play out over several weeks rather than days.

How I’d manage it: If WM tags the $242 area quickly and momentum stays strong, I’d consider trimming into that strength since it lines up with the prior 52-week high zone. If the stock chops sideways but holds above the $224-$225 region (near the 10-day/9-day area), I’m comfortable giving it time. A clean break below the stop would tell me the market is no longer paying up for the setup.

Key points that support the long

• WM is trading in a strong uptrend: price above the 10/20/50-day averages, with bullish MACD.
• The stock is still below its $242.58 52-week high, leaving room for a measured continuation move.
• Capital return matters here: $3B buyback authorization and a 14.5% dividend increase create support on dips.
• Even with integration noise, the broader business is positioned to benefit as volume headwinds fade while pricing stays firm.

Risks and counterarguments (what can go wrong)

I like the setup, but this is not a free lunch. Here are the real ways you lose money in this trade:

• Valuation risk is the big one. At ~36x earnings and ~38.6x free cash flow, WM doesn’t need bad news to go down. It only needs “less good” news or a market rotation away from expensive defensives.
• Momentum is stretched. An RSI around 71.6 can be a sign of strength, but it also means pullbacks can be sharp if buyers step away for even a few sessions.
• Integration execution risk. The healthcare solutions business has already shown some underperformance tied to pricing delays and ERP challenges. If those issues persist, the market can start to doubt the synergy story and punish the multiple.
• Balance sheet constraints. Debt-to-equity around 2.45 is not extreme for this type of business, but it does reduce flexibility if rates rise or if cash flows disappoint relative to expectations.
• Recycling/commodity sensitivity. Parts of WM’s model have exposure to commodity pricing through recycling processing and sales. If that turns into a profit headwind, it can muddy the “steady compounder” narrative.

Counterargument to my thesis: The bearish case is that you’re simply late. WM might already reflect peak optimism: the market has priced in pricing strength, margins, and capital return. If volume improvement is modest and growth doesn’t visibly inflect soon, the stock could drift or de-rate, even if the underlying business remains healthy. That’s exactly why the stop matters in a premium multiple name.

Conclusion - stance and what would change my mind

I’m bullish on WM as a trade idea here. The stock has the technical structure you want, it has a clear “return of growth” narrative as volumes normalize, and shareholder returns provide a backstop that a lot of industrials simply don’t have.

What would change my mind is straightforward: a break of trend support that doesn’t recover quickly (hence the $223.90 stop), or fresh evidence that integration issues are worsening enough to threaten the premium multiple. If WM can stay above the rising average structure and keep marching toward $242.50, I think the path of least resistance remains higher over the next 45 trading days.