Waste Management heads into its July 24 Q2 earnings release with options positioning signalling unusual conviction on the upside — a notable divergence from the cautious hedging that typically surrounds large-cap industrials before a print.
The clearest story is in the options market. The put/call ratio dropped sharply to 0.47 on Monday, almost 2.8 standard deviations below its 20-day average of 0.57 — placing it near the 52-week low of 0.37. That means call volume is running far heavier than put volume relative to recent norms, a setup that reflects demand for upside exposure rather than downside protection. The stock has done its part to justify that confidence: WM has gained roughly 11% over the past month to close at $239.05, with the weekly move a modest +1%. The broader borrow market offers no resistance to that momentum. Availability is extraordinarily loose at 3,304% — more than 183 million shares remain available to lend against a short base of just 1.57% of the free float. Borrowing costs have also fallen sharply, now running at just 0.38%, down more than 37% week-on-week. There is no meaningful short pressure in this stock.
The analyst community has been directionally supportive in the run-up. Citigroup lifted its target to $269 and Scotiabank moved to $260, both within the past two weeks. CIBC upgraded WM to Outperformer earlier this month, the most significant rating change of the recent cycle. The consensus mean target of $257.52 implies modest upside from current levels, and the direction of travel has been upward. Bulls point to the planned return of roughly 90% of $3.8 billion in targeted free cash flow to shareholders in FY26 — a 162% year-on-year increase — alongside improved pricing power from the SRCL integration. Bears counter that sub-5% sales growth in H1, recycled commodity headwinds (a $14 million estimated EBITDA drag), and margin expansion driven more by reclassification than operational improvement leave the fundamental story short of compelling at a 27.7x trailing P/E and an EV/EBITDA of 14.2x.
The earnings history adds one wrinkle worth noting. After the April 2026 print, WM opened higher by roughly 2% but gave back those gains and more over the following five days. A similar pattern appeared after the prior event. Institutional ownership is broadly stable — BlackRock holds 7.5% and State Street added modestly last quarter — so the flow picture is not a live catalyst. Among correlated peers, most have slipped on the day: RSG fell 0.98%, WCN dropped 1.39%, and CWST declined 4.2%, while WM held nearly flat, suggesting some relative strength into the release.
Thursday's print is ultimately a test of whether WM's pricing and margin story can outrun a soft volume backdrop — and whether the call-heavy options positioning reflects genuine fundamental conviction or simply reflects the absence of bears willing to fight an 11% monthly rally.
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