Yahoo Finance Williams Companies: Most Analysts Recommend ‘Hold’ or ‘Buy’
4Q15 Results Unlikely to End Williams Companies’ Ongoing Troubles
Analyst ratings for WMB and WPZ
In this article, we’ll look at what Wall Street analysts recommend for Williams Companies (WMB) and Williams Partners (WPZ). At a broader level, ~45.5% of analysts rate Williams Companies a “hold,” ~45.5% rate it a “buy,” and the remaining ~9.1% rate it a “sell.” WPZ has a “hold” rating from 61.5% of surveyed analysts. The remaining 38.5% of analysts rate it a “buy.”
The median broker target prices of $35 and $38 for WMB and WPZ imply ~172.4% and ~170.7% price returns, respectively, in the next 12 months from their February 10, 2016, closing prices of $12.85 and $14.04. WMB peers Energy Transfer Equity (ETE) and Western Gas Equity Partners (WGP) have “buy” ratings from 77.8% and 76.9% of analysts, respectively. WMB constitutes ~1.5% of the Vanguard Energy ETF (VDE).
Outlook for WMB
Investors can consider the following positives and negatives before they decide to include WMB as a long-term investment.
Positives
significant project backlog
WMB and WPZ are expected to benefit from the rise in natural gas demand from power utility companies in the long run
Negatives
high leverage
Recently, WMB and WPZ were downgraded to Ba1 from Baa3 and to Baa3 from Baa2, respectively, by Moody’s Corporation due to their rising leverage. The rating agency has kept Williams Partners on a negative outlook. The downgrade is expected to increase WPZ’s and WMB’s cost of debt. For more detail, read Why Moody’s Downgraded Williams Partners and Williams Companies.
operating performance
WPZ’s operating performance is getting hurt by several production shut-ins across its Access Midstream and Northeast G&P segments.
uncertainties surrounding the ETE–WMB merger
high counter-party risk
WPZ’s low distribution coverage
For more pre-earnings coverage on midstream companies, check out our Master Limited Partnerships page.
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