Waste Management Gets a New Boost—A Tariff Safe Haven?

Key Points

• Waste Management stock keeps proving investors why it deserves a premium valuation, outperforming peers and the broader S&P 500 index as well. 
• A new boost from Wall Street goes to show the ceiling could be much higher for this name despite tariffs.
• Short sellers don't see a reason to stick around, giving buyers all the more reason to hold.

When investors search for new trade ideas or potential breakout stocks, only a handful of indicators tend to stand out beyond the typical technical patterns. One of the most valuable comes not from price charts, but from the research and positioning of experienced market participants with the insight and track record to spot real opportunities.

By tracking recent Wall Street analyst activity, particularly when it comes to ratings boosts, investors can somewhat steal the homework that has already been done by these analysts, leading them to their conclusions. However, stealing the homework doesn’t just mean buying what analysts are boosting and selling what they are downgrading; rather, it means attempting to reverse-engineer what might have driven the underlying decision.

Today’s case is found in an unlikely stock; shares of Waste Management Inc. NYSE: WM are the latest pick for a Wall Street upgrade for a reason. This stock is described as unlikely because it is part of one of the least exciting sectors of the market, found in the business services area, rather than the more exciting world of technology stocks. However, this lack of action and attention might be a fair tradeoff for investors looking into tariff protection.

Why Waste Management Works (And Will Keep Working)

This business model is as steady as it comes, considering that it churns profits and revenues as long as the underlying economy (in the United States, in this case) keeps running, hot or cool, regardless. With this in mind, investors can expect more stability in the coming months and a relatively immune space to run away from today’s uncertainty.

That safety can be translated into the stock’s low beta measure of only 0.7x, meaning it is roughly 30% less volatile than the broader S&P 500 index. Considering all that is happening now with President Trump's recent trade tariffs, most investors would want to have that in their portfolio.

By operating mostly within the waste made in the United States, the company can somewhat guarantee investors that they won’t wake up to a massive gap up or down as a result of new tariff announcements. Of course, that can also be measured by the fact that the stock now trades at its 52-week high, which also happens to be the stock’s all-time high level.

Not many other stocks can say the same in today’s market, and this price action is likely to continue into the future, which is why Wall Street decided to take this “low-hanging fruit” for an easy win to boost their ratings.

Sentiment Calls for Higher Stock Prices

While the consensus price target for Waste Management is set at $247 per share, which calls for a 4.2% upside potential from today’s prices, one specific analyst decided to give the stock the recognition it deserves since most others were probably focused on the more exciting names in the market.

Tami Zakaria, an analyst at J.P. Morgan Chase, decided to boost Waste Management’s rating to an Overweight compared to the previously set Neutral view. At the same time, the valuation target also rose to a high of $277 per share, this time calling for a much more fitting implied rally of as much as 17% from today’s prices.

At the same time, those who thought this disconnect in S&P 500 performance versus Waste Management stock performance could create a pullback have also been proven wrong. Short interest in the company declined by as much as 18.7% over the past month alone, showing investors a clear sign of bearish capitulation for the future of this name.

It makes sense; why would anyone bet against a company that has no bear case other than outperforming the S&P 500 during one of the most volatile markets in recorded history? More than that, Wall Street has landed on an actual driver that could justify these double-digit upside calls from today.

Earnings per share (EPS) are expected to come out at $2.10 for the third quarter of 2025, a decent boost of 26% from today’s reported $1.67 in EPS. Now, most investors know that where EPS growth goes, so does the stock price, and this growth in earnings surely justifies the upside being forecasted by this J.P. Morgan analyst.

There is one final check that investors can run when considering Waste Management stock a potential addition to their portfolios: how much the market is willing to pay for it compared to the rest of its peers. By trading at a price-to-book (P/B) ratio of 11.5x today, Waste Management stock calls for a steep premium compared to the average 5.4x paid for the rest of the stocks in the business services sector.

Some would call this stock expensive; others will recognize the fact that the market is always willing to overpay for stocks that justify this premium, a justification that will show itself (as it already has) through outperformance relative to peers and the broader S&P 500.