Analyst ratings for Williams Companies
In this final part of our series, we’ll see what Wall Street analysts are recommending for Williams Companies (WMB). At a broader level, 60.0% of analysts rate WMB a “buy,” 26.7% rate it a “hold,” and the remaining 13.3% rate it a “sell.”
The above table shows recommendations for WMB from some of the brokers surveyed. The high and low target prices for WMB are $34 and $24, respectively. The median broker target price of $29 implies a -2.0% price return in the next 12 months from its September 14, 2016, closing price of $29.60.
WMB’s peers Energy Transfer Equity (ETE) and Enbridge (ENB) have “buy” ratings from 52.9% and 80.0% of analysts, respectively. Williams Partners (WPZ), WMB’s MLP subsidiary, has been rated a “hold” by 66.7% of the analysts surveyed by Bloomberg.
Outlook for Williams Companies
You can consider the following positives before deciding to include WMB as a long-term investment.
- significant project backlog
- expected to benefit from the rise in natural gas demand from power utilities, LDCs (local distribution companies), and LNG (liquefied natural gas) exports in the long run
- strong natural gas supply growth in the Northeast, which is expected to drive Williams’s Northeast Gathering & Processing business
You may also want to consider the following negatives before including WMB as a long-term investment.
- highly leveraged
- dividend cut from $0.64 per share to $0.20 per share
- throughput volume decline in some regions due to production-related shut-ins
- high NGL (natural gas liquids) exposure, although it’s expected to fall slightly with the asset sale
- cancellation in the Barnett Shale region
- two failed buyouts in less than a year
For similar coverage on midstream companies, check out our Master Limited Partnerships page.