Williams Cos. ( NYSE: WMB ) -3.2% in Wednesday's trading as Citi downgraded shares to Equal Weight from Overweight with a $37 price target, seeing more moderate upside potential coming into 2023 trading at a premium to diversified U.S. natural gas peers and the pullback in domestic natgas prices.
Citi's Theresa Chen sees Williams ( WMB ) as the owner of a premier mix of gas transmission and dry gas-oriented G&P assets with an upward fee-based earnings trajectory, but "the positive impulse on sentiment from rising natural gas prices that WMB benefitted from in 2022 moderating as we move into 2023 amid a lower gas price environment."
At the same time, Chen downgraded Magellan Midstream Partners ( NYSE: MMP ) to Overweight on its ability to earn higher refined products tariffs per barrel on longer-haul routes given a sizable year of maintenance for its refining customers.
Among U.S. refiners, Chen is most bullish on Valero Energy ( NYSE: VLO ) "due to its ability to benefit from favorable export economics if/when global distillate supply tightens" on the heels of Europe's price cap on Russian refined product imports.
Williams ( WMB ) is "a moat-worthy energy midstream giant with a steady and growing business" whose shares are attractively priced for dividend growth investors, Gen Alpha writes in an analysis posted recently on Seeking Alpha .
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Williams slides after Citi downgrade; Magellan Midstream raised