Will This Upgrade Help Williams Cos. (WMB) Stock Today?

NEW YORK (TheStreet) -- Shares of Williams Cos. Inc.  (WMB) were upgraded to "buy" from "neutral" at ISI Group, citing favorable risk/reward, and with a price target of $46.

The stock is up slightly in pre-market trade.

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Separately, TheStreet Ratings team rates WILLIAMS COS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate WILLIAMS COS INC (WMB) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 38.99% is the gross profit margin for WILLIAMS COS INC which we consider to be strong. Regardless of WMB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WMB's net profit margin of 8.00% compares favorably to the industry average.
  • WILLIAMS COS INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, WILLIAMS COS INC reported lower earnings of $0.64 versus $1.16 in the prior year. This year, the market expects an improvement in earnings ($1.11 versus $0.64).
  • WMB, with its decline in revenue, slightly underperformed the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 13.0% when compared to the same quarter one year ago, dropping from $161.00 million to $140.00 million.
  • You can view the full analysis from the report here: WMB Ratings Report

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