Waste Management Sees Lockdown-Related Surge in Demand

Stifel raised its price target on WM to $115 from $110

The shares of Waste Management, Inc. (NYSE:WM) are down 1.1% to trade at $99.72 this morning after the firm said it would start seeking higher fees for its home trash pick up, as demand surges due to shelter-in-place orders. Waste Management's CFO Devina Rankin added that residential trash volume has surged 15% to 25% since lockdown measures were put in place.

Despite the dip, Stifel lifted its price target to $115 from $110 -- a roughly 16% premium to current levels. Digging deeper, sentiment surrounding WM has been split, with seven analysts saying "buy" or better, compared to six saying "hold." Meanwhile, the 12-month consensus price target of $108.92 is a 9.3% premium to WM's current perch.

Waste Management has had difficulty rebounding back to its pre-bear gap lows near the $110 region, which coincides with the stock's 320-day moving average. The equity was able to champion its 20-day moving average in early April, but has since been stuck trading between the $96 and $103 levels. For the year, WM is down 12.3%.

With earnings come and gone, the stock's near-term options are attractively priced at the moment. WM's Schaeffer's Volatility Index (SVI) stands at 26%, in the low 16th percentile of its annual range, indicating that now is a good time to speculate on the security's next move with options.