NEW YORK (TheStreet) -- Energy Transfer Equity (ETE) stock is declining by 5.32% to $6.76 in late-morning trading on Thursday, after the company axed expectations for its proposed $14 billion acquisition of rival pipeline company Williams Cos. (WMB).
Energy Transfer now anticipates that the base case for earnings before interest, taxes, depreciation and amortization from commercial synergies from the takeover will be roughly $170 million per year by 2020, according to an SEC filing, Reuters reports.
This is significantly lower than previous projections for more than $2 billion.
The forecasts assume that oil prices will range between $32.92 to $44.31 per barrel in 2020, according to Reuters. Oil prices are now around $39.50 per barrel, and futures for delivery in 2020 are just below $50 per barrel.
Additionally, Energy Transfer will take on another $6.05 billion in debt to finance the cash portion of the deal, and will assume Williams Cos. roughly $4.2 billion in outstanding debt as well. Energy Transfer already had roughly $7 billion in debt at the end of 2015, according to Reuters.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Energy Transfer Equity's strengths such as its impressive record of earnings per share growth and compelling growth in net income are countered by weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
You can view the full analysis from the report here: ETE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.