Seaport Global Securities has adjusted its stance on Williams Companies (NYSE: NYSE:WMB), downgrading the stock from Buy to Neutral as the firm's analyst cited the stock's significant year-to-date performance, noting a more than 22% increase.
Currently, Williams Companies is trading at approximately 11 times the firm's 2025 EBITDA estimates. This valuation represents a one-turn premium compared to the company's five-year historical average and aligns with its ten-year average.
Williams Companies has outperformed the Alerian Select Midstream Index AMEI by over 500 basis points since the start of the year. Seaport Global Securities' decision to move to the sidelines is a result of this strong year-to-date run. The firm's perspective is that the current valuation fully reflects the stock's prospects.
The downgrade comes at a time when energy stocks have been closely watched by the market due to fluctuations in gas prices and the evolving energy landscape.
Williams Companies reported an adjusted net income from continuing operations of $719 million, or $0.59 per diluted share, for the first quarter of 2024. Analysts from Mizuho Securities, Scotiabank, JPMorgan, Argus, and Truist Securities had updated their outlook on the company.
InvestingPro Insights
Williams Companies (NYSE:WMB) has been a topic of discussion recently, especially after Seaport Global Securities downgraded the stock. In light of this development, certain metrics and InvestingPro Tips can provide additional insight into the company's current standing. According to InvestingPro data, Williams Companies has a market capitalization of $52.32 billion and is trading with a P/E ratio of 18.11. The company's revenue for the last twelve months as of Q1 2024 stood at $10.16 billion, with a notable gross profit margin of 60.7%.
InvestingPro Tips highlight that Williams Companies has raised its dividend for 6 consecutive years, indicating a commitment to returning value to shareholders. Furthermore, the stock has been trading near its 52-week high, with a price percentage of 95.19% of that high, showcasing investor confidence in the stock. However, analysts have revised their earnings downwards for the upcoming period, suggesting potential headwinds.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/WMB. These tips may provide further guidance on the stock's valuation and performance. To access these insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 12 more tips available, including insights on profitability and price volatility, investors can make more informed decisions regarding Williams Companies.
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