Waste Management (WM)

Sleepers: the Smart‑Truck platform now delivers a $300 M run‑rate EBITDA boost and the RNG production target of 25 MM MMBTU is a hard‑floor for renewable‑energy earnings. The headline 5.5% EBITDA growth looks modest, yet underlying growth is 9.1% when you strip out wildfire tailwinds, showing the core business is healthier than the market assumes. The binding constraint is the pipeline interconnect delay that pushes RNG ramp‑up and associated margin upside into late 2026, while residential volume continues to erode and DSO data is hidden - a potential collection‑quality choke point. Management’s favorite quote: “We’re still in the early innings of capturing the full value of these capabilities,” but they already monetized the Smart‑Truck at $300 M - a mismatch between narrative and reality. My view flips if DSO rebounds above 10 days or if RNG interconnects miss the 2026 deadline, both of which would sharply curb cash‑flow conversion and margin upside.