Markets & Finance

Merrill Resumes Coverage on Williams with 'Buy'


Merrill Lynch resumes coverage on Williams (WMB) with buy.

Analyst Sam Brothwell says Williams is arguably the energy sector's best turnaround story, with a clearly defined business strategy and solid liquidity. He says growth is driven by deepwater Gulf of Mexico infrastructure development and a low-risk drilling program in the Rockies. He notes Williams currently sits on $3 billion of cash and estimates $1 billion in free-cash flow in 2004 and 2005.

Brothwell sees substantially reduced leverage between now and 2005. He estimates every $100 million of debt reduction adds about 1 cent to earnings per share. He sees 13 cents 2003 earnings per share, 41 cents for 2004, and 85 cents for 2005. He has a $12 12-month target.


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