One man’s trash, another man’s gold? Equity valuation of waste management

  • Agnes Wen Bin Landehag (Student)

Student thesis: Master's Thesis


The objective of this paper is to examine Waste Management Inc. (WM) for investors looking to increase their ESG exposure. Although the waste management industry may not seem like a typical ESG trade, waste management companies are increasingly growing their environmental services such as recycling and landfill gas production, positioning them well to benefit from the greater ESG megatrend. However, these companies do not receive the same premiums as other sustainable sectors. This paper provides an investment recommendation and equity valuation for WM a leading waste management services provider in North America. The 2023 target price of $185 (+12% upside) is derived from an ESG-integrated fundamental analysis and discounted cash flow valuation. The hold recommendation suggests that current market prices already reflect similar assumptions regarding sustainability and profitability, and management guidance. Key catalysts such as industry pricing momentum, margin improvements, sustainability investments, and regulations. Risks include competition, commodity prices, regulations, and macroeconomic factors. Comparisons with investment banks' target prices show similar valuation assumptions, with discrepancies attributed to forecasting assumptions about the sustainability investments and profitability of the company which also explains the stock trading at a slight discount. The paper contributes to understanding ESG integrated equity valuation for the Company and its industry. It offers insights for investors interested in ESG companies and equity valuation processes. Future studies should focus on monitoring the stock and evaluating different ESG-integrated equity valuation methods. The findings contribute to the growing demand for ESG-related investments and provide investors with information to support well-informed investment decisions.
Date of Award27 Jun 2023
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorFani Kaligaru (Supervisor)


  • Equity valuation
  • Waste Management Inc.
  • ESG-integrated valuation


  • Mestrado em Finanças

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