Jefferies Raises Williams Companies Price Target to $76 on Gas Rally

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Jefferies maintained its Buy rating on Williams Companies and raised its price target from $71 to $76, implying roughly 14.4% upside. The surge in natural gas prices from January’s extreme cold and supply disruptions is expected to boost pipeline volumes and revenue for the midstream operator.

1. Institutional Stake Reduction by Principal Financial Group

During the third quarter, Principal Financial Group Inc. trimmed its position in Williams Companies by selling 11,912 shares, reducing its holding by 0.7%. Following the sale, the firm held 1,690,371 shares, representing 0.14% of Williams Companies and valued at approximately $107.1 million. This modest divestiture contrasts with other institutional moves: Private Wealth Management Group LLC boosted its stake by 104.8% to 469 shares, Hartford Funds Management initiated a position with roughly $29,000 invested, and Salomon & Ludwin LLC added a new holding worth about $35,000. Overall, institutional investors now account for 86.44% of Williams Companies’ shares.

2. Q3 Financial Performance and Outlook

In the third quarter, Williams Companies reported revenue of $2.92 billion, exceeding analysts’ consensus by $50 million and marking a 10.2% year-over-year increase. However, earnings per share came in at $0.49, missing estimates by $0.02. The firm maintained a net margin of 20.61% and delivered a return on equity of 16.74%. Management reaffirmed its full-year earnings guidance, projecting approximately $2.08 of EPS for the current fiscal year based on robust midstream demand and ongoing project commissioning.

3. Dividend Increase and Analyst Ratings

Williams Companies declared a quarterly dividend of $0.525 per share, up 5% from the prior payout, translating to an annualized distribution of $2.10 and a payout ratio exceeding 100%. The ex-dividend date is March 13, with payment scheduled for March 30. On the analyst front, three firms have issued Strong Buy opinions, eleven maintain Buy ratings, five recommend Hold and one issues a Sell. The consensus target for EPS growth remains solid, supported by a P/E/G ratio of 1.57 and a debt-to-equity ratio of 1.73, underscoring balanced leverage amid stable cash flows.

Sources

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