Waste Management heads into its Q1 2026 earnings print with the Street broadly constructive but quietly raising the bar on execution.
Analyst sentiment has shifted upward ahead of the release. JP Morgan raised its target to $270 — from $265 — earlier this month while keeping an Overweight rating. Baird followed with a lift to $260, also reiterating Outperform. Both moves signal that the bull case is gaining traction, not losing it. The consensus mean target is $254.72 against a current price of $227.35, leaving roughly 12% implied upside. That gap is wide enough to keep the majority of the Street leaning positive, but not so stretched as to invite complacency. The core bull argument centres on the SRCL integration driving better pricing discipline and organic margin improvement, alongside a plan to return roughly 90% of the $3.8 billion FY26 free cash flow target to shareholders — a figure that would represent 162% year-over-year growth.
Bears focus on a softer near-term revenue picture. Sales growth below 5% in the first half of the year is the central concern, compounded by declining recycled commodity prices that are expected to shave around $14 million from adjusted EBITDA. More critically, bears argue that a large share of the expected 80 basis points of margin expansion in 2026 comes from accounting reclassification and sustainability-project contributions rather than core operational improvement. Rising operating costs and potential EPA regulatory shifts around Renewable Fuel Standards for the renewable natural gas segment add further uncertainty at the margin.
Positioning in the lead-up is notably relaxed. Short interest has crept up — rising around 8.7% over the past week to 1.6% of the free float — but that remains a modest level in absolute terms. The borrow market is equally calm: cost to borrow is just 0.53% annualised and share availability is ample, with no signs of squeeze pressure building. Options traders are equally sanguine. The put/call ratio of 0.48 is almost exactly in line with its 20-day average, near the lower end of a 52-week range that extends up to 0.86. There is no defensive hedging surge heading into the print. The stock itself has been resilient — up 1% over the past month and 1.8% on the week — while close peers RSG and WCN lost ground over the same period, suggesting some relative-strength rotation into WM.
The two prior quarterly prints produced day-one declines of 2.8% and 4.0% respectively, so the earnings reaction pattern has tilted negative recently. The report will test whether the SRCL integration is delivering the pricing and margin improvement the bulls have been modelling — or whether near-term revenue headwinds and non-operational margin drivers dominate the narrative.
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