• In recent days, Waste Management has drawn strong interest from investors and received several analyst upgrades, reflecting confidence in the company’s fundamentals and its expanding presence in recycling, healthcare waste, and renewable energy.

• An important development is Waste Management’s US$7.2 billion acquisition of Stericycle, which significantly increases its role in the healthcare waste sector and potentially creates efficiencies across its broader platform.

• We’ll explore how Waste Management’s diversification into healthcare and renewable energy may influence its longer-term investment case.

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Waste Management’s appeal for many investors centers on its broadening role in sustainability, recycling, and healthcare waste management, underpinning a resilient business model. While recent analyst upgrades and the acquisition of Stericycle are boosting sentiment, the most important short-term catalyst remains successful integration of this large deal, while the biggest risk is the heightened leverage it brings. At present, these events have not materially changed the overall risk profile or near-term financial health of the company.

The acquisition of Stericycle stands out as a highly relevant announcement, given its scale and impact on Waste Management’s diversification into healthcare services. Bringing Stericycle into the fold could offer operational synergies and cost improvements, especially as Waste Management seeks efficiencies across its expanded platform. Longer-term, delivering on those integration benefits is likely to remain a critical factor for future earnings and risk considerations.

However, investors should be aware that with greater size and opportunity comes higher leverage, which means any unexpected integration pitfalls…

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Waste Management’s outlook anticipates $29.4 billion in revenue and $4.0 billion in earnings by 2028. This requires 7.0% annual revenue growth and a $1.3 billion increase in earnings from the current level of $2.7 billion.

Uncover how Waste Management’s forecasts yield a $246.12 fair value, a 13% upside to its current price.

Private investors in the Simply Wall St Community value Waste Management with estimates from US$199.95 to US$246.12 based on 11 separate analyses. At the same time, many are watching closely to see if recent acquisitions truly deliver the expected efficiencies and earnings impact in a challenging environment, so opinions vary and there are several perspectives to consider.