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WMB at 52-Week Lows: Can It Regain Upward Momentum?

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Williams Companies’ recent performance

William Companies (WMB), the C corporation GP of Williams Partners (WPZ), recently saw a new 52-week low of $24.10. However, it has recovered slightly since then. Overall, it has lost ~17.5% since the start of this year. 

During the same timeframe, the Alerian MLP ETF (AMLP), which comprises 25 energy MLPs, has lost 12.1% while the Energy Select Sector SPDR ETF (XLE) is also down. WMB is underperforming AMLP and the broader energy sector.

WMB’s year-to-date underperformance could be attributed to Williams Partners’ (WPZ) weak earnings growth and the possible higher impact of the FERC ruling on WPZ compared to most midstream companies. The lower-than-expected drilling activity in the Northeast remains a minor concern.  

According to the recent rigs report by Baker Hughes, the rig count in the Utica region averaged 20 in 1Q18 compared to 29 in 4Q17.

Factors that could weigh on Williams Partners’ stock performance in the near term include the uncertainty related to the rate case settlement on the Transco pipeline following the FERC Tax ruling, a negative outlook on the Discovery system, trade war tensions, and a fall in crude oil prices.

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Williams Companies’ one-year performance

WMB is down 16.4% over the past year. During the same timeframe, AMLP has lost 25.3%. Williams Companies is still outperforming AMLP by ~900 basis points. This trend could be attributed to Williams Companies’ improved financial position and lower commodity price exposure. 

WPZ has lost 17.5% in one year. Among WMB’s peers, Enbridge (ENB) and Enterprise Products Partners (EPD) have lost 30.9% and 11.2%, respectively.

Series overview

In this series, we’ll discover whether WMB can regain its upward momentum following the recent decline. We’ll look into WMB’s price forecast and technical indicators, as well as its valuation and analyst recommendations.

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