Waste Management Targets $3.8B Free Cash Flow by 2026, $800M Renewable EBITDA
Waste Management shares were at $216.18 as of Jan. 13, trading at trailing and forward P/Es of 34.04 and 25.71 after delivering 16% year-over-year revenue growth driven by price increases and volume gains. The company generated $2.4 billion in free cash flow last year, expects $3.8 billion by 2026 (20% CAGR), and targets $760–800 million renewable energy EBITDA by 2027 alongside a $3 billion buyback and 14.5% dividend raise.
1. Core Business and Valuation
Waste Management is North America’s largest integrated waste services provider with collection routes, transfer stations, recycling facilities and landfills forming a competitive moat. Shares traded at $216.18 as of January 13, reflecting a trailing P/E of 34.04 and forward P/E of 25.71.
2. Revenue and Cash Flow Growth
The company achieved 16% year-over-year revenue growth in its core operations through pricing power and modest volume gains. Free cash flow reached $2.4 billion over the past year and is projected to climb to $3.8 billion by 2026, implying roughly a 20% CAGR through heavy capex declines.
3. Renewable Energy Initiatives
Investments in landfill gas-to-energy projects and recycling automation are expected to drive a new growth vector. Management forecasts the renewable energy segment to generate $760–800 million in EBITDA by 2027 as captured methane is converted into natural gas and electricity.
4. Shareholder Returns and Acquisition Risks
Waste Management plans a 14.5% dividend increase for 2026 and a new $3 billion share buyback authorization. Integration and commodity price risks tied to the $7.2 billion Stericycle acquisition represent key near-term concerns.