NEW YORK (TheStreet) -- Williams Cos. (WMB) - Get Williams Companies, Inc. Report stock is down by 5.78% to $15.32 in early-afternoon trading on Thursday, after rival pipeline company Energy Transfer Equity (ETE) slashed its expectations for the companies' proposed $14 billion merger.
Energy Transfer now believes that the base case for earnings before interest, taxes, depreciation and amortization from commercial synergies from the deal will be around $170 million a year by 2020, down from previous forecasts of more than $2 billion, according to an SEC filing, Reuters reports.
The outlook assumes that oil prices will range between $32.92 to $44.31 per barrel in 2020. However, if oil prices rally between $53.97 and $64.26 per barrel by then, EBITDA could be closer to $590 million a year.
Additionally, Energy Transfer plans to grant certain awards totaling roughly 10% of outstanding common shares of Energy Transfer Corp., which Energy Transfer has created to purchase Williams, Reuters notes.
Williams shareholders would consequently hold roughly 75% of outstanding shares of Energy Transfer Corp., down from about 81% before the grant.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.
Williams Cos.'s weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: WMB
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.