UBS believes that reduced leverage and the resumption of share repurchases could drive shares of Waste Management higher from here. The bank upgraded the waste management stock to a buy rating from neutral. It also lifted its 12-month price target to $260 per share from $225, which signals upside of about 19%. Analyst Jon Windham cited rising momentum in Waste Management's multi-year investment cycle. The company has recently reduced its leverage, thereby raising its free cash flow, while also announcing the completion of major growth investments. WM 1Y mountain WM 1Y chart "We anticipate that WM's resumption of share re-purchases (suspended since 1Q24) will result in a ~2.5x increase in capital returned to shareholders and likely drive a relative valuation re-rating in 2026," he wrote. Windham noted that Waste Management's relative valuation increased by up to 20% following previous such investment cycles. The analyst added that the integration of WM Healthcare Solutions, formerly known as Stericycle and acquired by the company in 2024, "is progressing better than expected." "Given WM's leverage trending down to its targeted range of 2.5- 3x, we see it as likely that WM is realizing synergies on or slightly ahead of schedule," he added. Windham clarified that his new price target values shares at roughly 14.5 times their 2027 EBITDA estimate. This multiple sits modestly above the company's five-year average of about 14x and reflects prior periods in which increased capital returns supported a premium valuation relative to the broader market, the analyst wrote. Shares of Waste Management have added just 5% over the past 12 months. The stock ticked slightly higher after the rating change.
