Williams Companies’ Recent Performance and Expectations

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Williams Companies’ Recent Performance and Expectations PART 1 OF 5

What’s Driving Williams Companies’ Sluggish Performance?

Williams Companies’ recent performance

Williams Companies (WMB) has been sluggish in recent trading sessions despite the recent gains in crude oil and natural gas. The sluggishness might be due to the general negative sentiment in the midstream sector. There are concerns about lower crude oil supplies. The recent losses have eroded most of the gains during early and mid-September. Williams Companies has risen 0.8% in September as of September 27. At the same time, the Alerian MLP ETF (AMLP), which is comprised of 25 energy MLPs, fell 0.3%.

What’s Driving Williams Companies’ Sluggish Performance?

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YTD performance

Williams Companies has lost 4.2% since the beginning of 2017. Its peers, Kinder Morgan (KMI) and Enterprise Products Partners (EPD) have fallen 7.0% and 3.9%, respectively. For details on Kinder Morgan’s performance last week, read Kinder Morgan: Weakness Continued in the Week Ending September 22.

AMLP has lost 11.4% in 2017. So far, Williams Companies has outperformed AMLP in 2017. Williams Companies’ outperformance relative to AMLP could be attributed to its reduced crude oil exposure through asset sales, improved financial position, and positive updates on Williams Partners’ (WPZ) organic projects.

Stock in the news

Recently, Moody’s changed the outlook for Williams Companies and Williams Partners to “positive” from “stable.” Their financial positions improved following some balance sheet strengthening measures. According to Pete Speer, Moody’s Senior Vice President, “If the partnership can continue its strong execution on growth projects while maintaining its lower financial leverage and good distribution coverage, the ratings could be upgraded in 2018.”

Williams Companies announced the startup of Greenfield Construction on the Atlantic Sunrise Project. The project is an extension of the Transco pipeline network. It will connect Marcellus gas supplies to the US Mid-Atlantic and Southeastern markets.

Series overview

In this series, we’ll discuss whether Williams Companies can gain upward momentum after the recent weakness. We’ll look at Williams Companies’ technical indicators and price forecast. We’ll also discuss Williams Companies’ valuation and analysts’ recommendations.


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