Williams Companies (NYSE:WMB) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Saturday.
According to Zacks, “Concerned with Williams Companies’ high debt burden and regulatory setbacks suffered by its Constitution Pipeline project, we are downgrading our investment thesis from ‘Hold’ to ‘Sell’. WMB’s high leverage of over 71% restricts the financial flexibility of the firm to tap on growth opportunities. Further, Constitution Pipeline has been denied water permit by both New York DEC and FERC due to environmental reasons, crushing WMB's hopes to make the project operational till 2019. This has diluted the near-term earnings outlook. As it is, weaker- than-expected earnings in the last three quarters are likely to dampen investors’ confidence. The termination of the Energy Transfer deal has also been a big blow to the firm. We also need to factor the WMB’s low ROE and extensive exposure to natural gas, which translates into uncertain near-term outlook for the company. Hence we view WMB as a risky bet.”
Other analysts have also recently issued research reports about the company. Royal Bank of Canada reiterated a “buy” rating and set a $38.00 price objective on shares of Williams Companies in a research report on Tuesday, January 16th. Jefferies Group reiterated a “buy” rating and set a $37.00 price objective on shares of Williams Companies in a research report on Friday, January 12th. Bank of America assumed coverage on Williams Companies in a research report on Tuesday, January 9th. They set a “buy” rating for the company. Barclays cut Williams Companies from an “overweight” rating to an “equal weight” rating and lowered their price target for the company from $36.00 to $35.00 in a report on Wednesday, January 17th. Finally, Scotiabank restated a “hold” rating and issued a $36.00 price target on shares of Williams Companies in a report on Monday, January 29th. One research analyst has rated the stock with a sell rating, four have given a hold rating, ten have issued a buy rating and one has given a strong buy rating to the company’s stock. Williams Companies presently has a consensus rating of “Buy” and an average price target of $34.91.
In other news, insider James E. Scheel sold 26,915 shares of Williams Companies stock in a transaction dated Thursday, January 11th. The stock was sold at an average price of $33.00, for a total value of $888,195.00. The transaction was disclosed in a document filed with the SEC, which is available through this link. Also, CEO Alan S. Armstrong acquired 6,000 shares of Williams Companies stock in a transaction dated Wednesday, November 15th. The stock was purchased at an average cost of $27.23 per share, for a total transaction of $163,380.00. Following the completion of the purchase, the chief executive officer now directly owns 345,527 shares in the company, valued at $9,408,700.21. The disclosure for this purchase can be found here. 0.53% of the stock is owned by insiders.
Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. FMR LLC lifted its position in Williams Companies by 1.2% during the 4th quarter. FMR LLC now owns 79,894,750 shares of the pipeline company’s stock worth $2,487,922,000 after acquiring an additional 973,256 shares in the last quarter. BlackRock Inc. lifted its position in Williams Companies by 12.4% during the 4th quarter. BlackRock Inc. now owns 77,428,540 shares of the pipeline company’s stock worth $2,360,797,000 after acquiring an additional 8,532,633 shares in the last quarter. Vanguard Group Inc. lifted its position in Williams Companies by 4.4% during the 2nd quarter. Vanguard Group Inc. now owns 64,062,726 shares of the pipeline company’s stock worth $1,939,819,000 after acquiring an additional 2,671,905 shares in the last quarter. Finally, State Street Corp lifted its position in Williams Companies by 0.4% during the 2nd quarter. State Street Corp now owns 42,452,276 shares of the pipeline company’s stock worth $1,285,450,000 after acquiring an additional 162,568 shares in the last quarter. 84.72% of the stock is currently owned by institutional investors and hedge funds.
About Williams Companies
The Williams Companies, Inc is an energy infrastructure company. The Company is focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGL), and olefins. As of December 31, 2016, its interstate gas pipelines, midstream and olefins production interests were held through its investment in Williams Partners L.P.
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