2023-05-16 12:32:12 ET
Williams Cos. ( NYSE: WMB ) -1.9% in Tuesday's trading despite receiving an upgrade to Buy from Neutral with a $36 price target at Citi, which said the stock is oversold after underperforming so far this year.
The selloff in Williams ( WMB ) shares, driven by declining natural gas prices, implies the market is ascribing a premium multiple to what it considers to be lower-quality commodity-exposed earnings, Citi analyst Spiro Dounis said.
"Admittedly, we see slightly more downside for natural gas prices and are at risk of upgrading early. That said, we've likely already experienced most of the downside and highest rate of change - suggesting asymmetric upside potential, even if not imminent," Dounis wrote.
Williams ( WMB ) may be in position to upgrade guidance as soon as next earnings season, and it should return ~55% of cash flows to shareholders via dividends and buybacks through 2027, Dounis also said.
More on Williams Cos:
- Financial and valuation comparison to sector peers
- Analysis: The Williams Companies Falls Short Despite A Long Dividend History
- Stock price return: Down 11% YTD, down 19.5% in the past 12 months
For further details see:
Williams upgraded to Buy at Citi as commodity trough approaches