Williams ( NYSE: WMB ) -1.5% in Monday's trading as Bernstein downgraded shares to Market Perform from Outperform with a $34 price target, trimmed from $37, saying its medium term gas outlook has dropped as fewer liquefied natural gas projects have reached final investment decision for 2025-27 than expected six months ago.
At the same time, an increase seems to be taking place in the gas/oil ratio trajectories of associated basins, particularly the Permian, as gas cuts are growing, Bernstein's Jean Ann Salisbury said, with the two events combining to lower the wedge of gas needed from the Haynesville basin over the next four years.
"This means two things need to happen to balance supply and demand, neither good for WMB: We think 2024 gas prices need to fall further and half of Haynesville rigs need to exit this year," according to Salisbury, adding that when the gas price has fallen to current levels, Williams' ( WMB ) shares have fallen due to perceived counterparty risk.
Williams ( WMB ) is a "moat-worthy energy midstream giant with a steady and growing business," and the shares are attractively priced for dividend growth investors, Gen Alpha writes in an analysis published on Seeking Alpha .
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Williams downgraded at Bernstein on falling natgas prices, Haynesville outlook