WM Earnings Due — Bulls Still Dominant, Short Sellers Retreat Further

Waste Management arrives at its July 29 earnings event with options traders as bullish as they have been all year and short sellers continuing to cut exposure — a one-sided setup that has only intensified since the previous preview.

The options market tells the clearest story. The put/call ratio has slipped further to 0.47, nearly 2.8 standard deviations below its 20-day mean of 0.55. That puts call-heavy positioning close to the 52-week floor of 0.37 — the most decisively upside-skewed reading of the year. The stock has earned that conviction: WM has gained 6.2% over the past month to close at $239.41, adding another 2.7% on the week. The borrow market adds nothing to the bear case. Availability is extraordinarily loose at over 4,100% — meaning roughly 179 million shares remain available to lend against a short base of just 1.5% of the free float. Short interest fell nearly 6% on the week to around 5.9 million shares. Borrowing costs have dropped 24% week-on-week to just 0.39%. There is no short-side friction here.

The fundamental debate centres on whether WM's integration of Stericycle and its ambitious capital return program can offset near-term revenue softness. Bulls point to the plan to return approximately 90% of $3.8 billion in targeted FY26 free cash flow — a 162% year-on-year increase — and argue that SRCL-driven pricing improvements are strengthening the core business. Bears counter that first-half sales growth below 5%, a $14 million EBITDA headwind from lower recycled commodity prices, and margin expansion driven partly by non-operational items (accretion reclassification and sustainability project accounting) leave the core business vulnerable. EPA regulatory risk around Renewable Fuel Standards is a secondary concern for the renewable natural gas segment. Analysts lean constructive: the mean target of $257.92 implies roughly 8% upside from current levels, and the most recent moves — Citigroup raising to $269 with a Buy, CIBC upgrading outright to Outperformer — reflect growing conviction rather than caution.

Waste Management's outperformance relative to peers is also notable heading into this print. Closest peer RSG fell 1.6% on the week and CWST dropped 4.6%, while WM gained ground. That divergence reflects market preference for WM's scale and pricing power — not short covering or momentum rotation.

The print arrives with bulls fully committed and short sellers having already voted with their feet; what the release must answer is whether operational improvement — not accounting reclassifications — is driving the margin story.