Williams Companies Inc. (NYSE: WMB) has had a wild ride during the time that oil prices tanked and came rushing back. Despite being up close to 200% from its lows, there may be more upside in Williams Companies itself, and even in Williams Partners L.P. (NYSE: WPZ).

Credit Suisse initiated coverage in Williams Companies with an Outperform rating and assigned a $33 price target. Williams Companies closed up 1.1% at $28.81 on Wednesday, and it was up another 1% at $29.10 Thursday morning. Williams Partners was started with a Neutral rating, but Credit Suisse’s price target of $44 compared with a prior closing price of $40.95. Both targets are above the Thomson Reuters consensus analyst price target.

Credit Suisse’s Bhavesh Lodaya noted why there is a more a favorable view on the company rather than on the master limited partnership (MLP):

While we find both Williams Companies and Williams Partners attractive, in our view, the current risk/reward tilts in Williams Companies’ favor. While we don’t rule out a takeout, the restructuring and board expertise now also positions WMB/WPZ to drive additional growth via acquisitions. The next leg of growth for them would likely be driven by investments in LNG projects and/or associated infrastructure.

The $33 target for the Williams Companies was based on an equal-weighted blend of 16 times the 2017 distributable cash flow expectation, 15 times the EV/2017 EBITDA and a three-stage dividend discount model (DDM) valuation that was also then discounted at a 9% cost of equity. This target price implied approximately 19% near-term total returns, which is above the median returns for Credit Suisse’s coverage. Lodaya also said:

Separately, we believe Williams Companies should trade at a control premium to its value of a direct ownership in Williams Partners, which it currently does not. Further, given the wider investor base we believe Williams Companies trades at roughly a 5% premium to Williams Partners similar to what we have seen with peers in the industry.

On Williams Partners, the $44 target price from Credit Suisse is based on an equal-weighted blend of 14 times expected 2017 distributable cash flow, 14 times EV/2017 EBITDA, and a three-stage DDM valuation discounted at a 9% cost of equity. Despite the Neutral rating, this still implies close to 13% near-term upside for a total return.

There were a few more positive observations in this Credit Suisse call:

• Williams is one of the premier natural gas platforms in the United States.
• Williams offers both traditional MLP investors and global non-MLP investors a way to invest in a long-term, fee-based and de-risked natural gas story.
• Williams Companies is not expected to pay taxes at least until 2020, and potentially longer depending on future restructuring or M&A.
• Natural gas production in the prolific Northeast (where Williams is the largest gatherer) is expected to roughly double over the coming five years.

Williams Companies has a 52-week trading range of $10.22 to $32.69 and a consensus analyst price target of $32.00. It also comes with a 2.8% dividend yield.

Williams Partners was last seen trading up 0.8% at $41.25. Its 52-week range is $12.69 to $41.56, and its consensus target price is $42.00. The dividend yield here is actually a distribution, with a yield equivalent at over 8%.

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