zorazhuang/iStock via Getty Images
Western Midstream Partners (NYSE:WES) -0.4% in Wednesday’s trading as Stifel downgrades units to Hold from Buy with a $39 price target, saying that while continuing to favor Western’s return of capital strategy and asset footprint, it believes the outlook is reflected in the current valuation.
Stifel touts Western’s (WES) capital return strategy which prioritizes leverage, distributions and then buybacks, and views the base distribution of $3.50 augmented with special distributions and buybacks as “providing a degree of flexibility to make investments for growth while ensuring capital returns to unitholders.”
Stifel also maintains its Buy rating on Williams (WMB) while trimming its price target to $43 from $46, believing cash flows should remain robust despite macro headwinds, with the stock remaining a strong yield vehicle for investors.
With a diversified gathering footprint and the largest U.S. long haul natural gas pipeline in Transco, Williams’ (WMB) footprint should remain insulated from commodity price swings with more than 90% fee-based margins, Stifel says.