uploads/2016/09/ANR-10.png

What Analysts Are Recommending for Williams Companies

By

Updated

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.

Article continues below advertisement

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.

Advertisement

More From Market Realist