Waste Management: is this Bill Gates-backed stock a good buy?
Waste Management (NYSE: WM) stock price has pulled back in the past few weeks as investors wait for the upcoming financial results. After peaking to a record high of $214.42 in March, it has retreated by over 3% to $207.
Bill Gates-backed company
Waste Management is a boring company that has a strong track record of delivering returns to its shareholders. Bill & Belinda Gates Foundation Trust is the second-biggest investor in the company with a stake of over $7 billion.
The company has been growing in the past few decades both organically and through acquisitions. It has also benefited from the growth of climate change issues since it sells credits to other carbon emitting companies.
Its annual revenue has moved from over $15.4 billion in 2019 to over $20.4 billion in 2023. It has also become a highly profitable company as its net income has jumped from $1.6 billion to more than $2.3 billion.
Waste Management has also been slashing its outstanding shares through buybacks. Its total shares stood at over 424 million in 2019 to about 401 million today. The management has committed to continuing with its share repurchase program.
The next important catalyst for the WM stock price will be on Wednesday when the company will publish its financial results. The average estimate is that its revenue rose to $5.21 billion in Q1, up from $4.85 billion a year earlier.
Investors expect that Waste Management’s revenue will rise to $5.45 billion in Q2 and to $21.5 billion this year. As such, the stock will likely rise if the company announces results that are higher than estimates.
Analysts are generally optimistic about Waste Management’s stock. Most of them have a buy or hold rating, with the most recent upgrade being from Jefferies, Citigroup, and JPMorgan. The average target is at $216, which is higher than the current $207.5.
Waste Management stock price forecast
The weekly chart above shows the WM share price against its outstanding shares. It has continued rising and moved above all moving averages, which is a positive sign. The Relative Strength Index (RSI) has remained above the overbought level. Also, the Average Directional Index (ADX) has jumped to over 40, signalling that the trend is strong.
Therefore, the outlook for the stock is still bullish ahead of the upcoming financial results. If this happens, the next price to watch will be at $215. The stop-loss of this trade will be at $200.
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