Williams Companies Inc (NYSE:WMB) stock was down on Tuesday following a downgrade from analysts.
Analysts at Jefferies have downgraded Williams Companies Inc stock from a “Buy” rating to a “Hold” rating. The investment banking firm as has a price target of $32 for WMB stock. WMB stock closed at $31.93 on Monday.
Christopher Sighinolfi, one of Jefferies analysts, says that the reason for the downgrade is changes that Williams Companies Inc announced on Monday. This includes plans to simplify its corporate structure, minimize its future equity needs, reduce leverage, improve cost and capital, as well as setting up its future path for distribution and dividend growth.
While Sighinolfi does note that this will include company-wide benefits, the analyst also says it undervalues Williams Companies Inc’s IDR position. He also says that the move limits the LT upside potential, reports StreetInsider.com.
Williams Companies Inc also announced on Monday that it will increasing its dividend by 50%. This will have it paying WMB shareholders a dividend of 30 cents per share. It is also looking for 10% to 15% in annual growth for its dividend over the next few years.
Williams Companies Inc is also starting a public offering for 65 million of its shares. It plans to use money gained from this offer to purchase more shares of Williams Partners LP (NYSE:WPZ). WMB wants to increase its stake in the company to 72%, Seeking Alpha notes.
WMB stock was down 9% as of Tuesday morning.