Williams Co (WMB) AI Stock Analysis

• Market Cap: $71.99B
• Dividend Yield: 3.39%
• Average Volume (3M): 7.05M
• Price to Earnings (P/E): 31.6
• Beta (1Y): 0.64
• Revenue Growth: 8.63%
• EPS Growth: -20.98%
• Country: US
• Employees: 5,829
• Sector: Energy
• Sector Strength: 54
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.60
• Shares Outstanding: 1,221,006,300
• 10 Day Avg. Volume: 8,022,021
• 30 Day Avg. Volume: 7,050,654
• PEG Ratio: -0.98
• Price to Book (P/B): 5.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.48
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 9.43
• Enterprise Value/Ebitda: 2.47
• 1Y Price Target: $64.46
• Price Target Upside: 7.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 71 Outperform
• Price Target: $65.00 ▲(8.19%Upside)

Williams Co's overall stock score is primarily driven by its strong financial performance and positive earnings call, which indicate robust profitability and strategic advancements. While high leverage and a relatively high P/E ratio present valuation concerns, the company's effective cash flow management, dividend yield, and recent corporate developments support a favorable investment outlook. Technical analysis suggests stable market conditions, adding to the confidence in the stock's performance.

Positive Factors

Financial Performance

Adjusted EBITDA surpassed consensus expectations by 2.6%, indicating stronger than anticipated performance.

Growth Potential

Williams Companies is projected to grow at a sector-leading 3-year EBITDA compound annual growth rate, indicating strong future performance.

Strategic Acquisitions

WMB acquired a 10% stake in Cogentrix, an IPP with significant capacity, which complements and potentially accelerates WMB's foray into power generation.

Negative Factors

Cash Flow Concerns

Free cash flow after dividends is relatively low, which could limit reinvestment opportunities.

Financial Risk

The leverage ratio has increased slightly, which may signal higher financial risk.

Leadership Change

WMB shares were weak post the print, which we largely attribute to the unexpected CEO transition.

Williams Co Business Overview & Revenue Model

Company Description

The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments. The Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines; and natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region, as well as various petrochemical and feedstock pipelines. The Northeast G&P segment engages in the midstream gathering, processing, and fractionation activities in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio. The West segment comprises gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana, and the Mid-Continent region, which includes the Anadarko, Arkoma, and Permian basins; and operates natural gas liquid (NGL) fractionation and storage facilities in central Kansas near Conway. The Gas & NGL Marketing Services segment provides wholesale marketing, trading, storage, and transportation of natural gas for natural gas utilities, municipalities, power generators, and producers; risk and asset management; and NGL marketing services. The company owns and operates 30,000 miles of pipelines, 29 processing facilities, 7 fractionation facilities, and approximately 23 million barrels of NGL storage capacity. The Williams Companies, Inc. was founded in 1908 and is headquartered in Tulsa, Oklahoma.

How the Company Makes Money

Williams Co generates revenue through several key streams. The primary source is its fee-based business model, where it charges fees for the transportation and storage of natural gas through its extensive pipeline network. Additionally, the company earns income from processing natural gas and extracting valuable NGLs, which are then sold to petrochemical manufacturers and other end-users. Williams also benefits from long-term contracts with producers and utilities, providing a stable and predictable cash flow. Significant partnerships with major energy producers enhance its market position and operational efficiency, further contributing to its earnings.

Williams Co Financial Statement Overview

Summary

Williams Co demonstrates a strong financial performance overall, with robust profitability and efficient cash flow management. The income statement reflects solid margins and profitability, while the balance sheet is marked by high leverage but strong returns on equity. The cash flow statement underscores effective cash generation, though there is room for improving free cash flow growth. While the company's leverage poses a risk, its steady revenue and profit growth, coupled with efficient cash management, present a generally favorable financial outlook.

Income Statement

The income statement for Williams Co shows stable revenue growth with a TTM (Trailing-Twelve-Months) revenue of $10.91 billion, up from $10.50 billion the previous year. Gross profit margin is healthy at 64.86%, and net profit margin is strong at 20.94%, indicating effective cost management and profitability. While EBIT and EBITDA margins are robust at 32.11% and 54.67% respectively, revenue growth has been modest. Overall, the company maintains a solid profitability profile with room for further growth.

Balance Sheet

Williams Co's balance sheet is characterized by a significant debt load, with a debt-to-equity ratio of 2.20, which indicates higher leverage and potential risk. However, the return on equity (ROE) is a healthy 18.29%, reflecting efficient use of equity to generate profits. The equity ratio is moderately strong at 22.73%, suggesting a stable capital structure. While the high leverage poses a risk, the company's ability to generate returns remains a positive aspect.

Cash Flow

The cash flow statement reflects a solid performance with an operating cash flow to net income ratio of 2.26, signifying strong cash generation relative to accounting profits. However, free cash flow decreased slightly from the previous year, resulting in a free cash flow to net income ratio of 0.92. Despite the decrease, the company's cash flow generation remains strong, supporting ongoing capital expenditures and debt servicing. The overall cash flow position is stable, with potential for enhancement through improved free cash flow growth.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.91B	10.50B	10.91B	10.96B	10.63B	7.72B
	Gross Profit
7.07B	8.43B	6.80B	3.68B	3.21B	3.06B
	EBIT
3.50B	3.34B	4.31B	3.02B	2.63B	2.20B
	EBITDA
5.96B	6.65B	7.77B	5.70B	5.09B	4.58B
	Net Income Common Stockholders
2.28B	2.23B	3.18B	2.05B	1.52B	211.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
477.00M	60.00M	2.15B	152.00M	1.68B	142.00M
	Total Assets
48.94B	54.53B	52.63B	48.43B	47.61B	44.16B
	Total Debt
24.41B	26.94B	26.46B	22.90B	23.68B	22.34B
	Net Debt
23.93B	26.88B	24.31B	22.75B	22.00B	22.20B
	Total Liabilities
34.61B	41.74B	37.74B	34.39B	33.51B	29.58B
	Stockholders Equity
11.79B	12.44B	12.40B	11.48B	11.42B	11.77B
Cash Flow		Free Cash Flow
2.10B	2.40B	3.37B	2.61B	2.70B	2.22B
	Operating Cash Flow
5.17B	4.97B	5.94B	4.89B	3.94B	3.50B
	Investing Cash Flow
-3.62B	-4.86B	-3.89B	-3.38B	-1.47B	-1.56B
	Financing Cash Flow
-2.12B	-2.20B	-49.00M	-3.04B	-942.00M	-2.08B

Williams Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 60.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMB, the sentiment is Positive. The current price of 60.08 is above the 20-day moving average (MA) of 59.64, above the 50-day MA of 58.64, and above the 200-day MA of 54.51, indicating a bullish trend. The MACD of 0.36 indicates Positive momentum. The RSI at 53.88 is Neutral, neither overbought nor oversold. The STOCH value of 33.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WMB.

Williams Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MPLX	81 Outperform	$51.99B	11.76	32.54%	7.41%	5.53%	11.29%
OKE	78 Outperform	$51.04B	15.95	16.04%	4.97%	40.55%	19.24%
EPD	77 Outperform	$69.30B	12.00	20.49%	6.70%	9.10%	4.37%
ET	75 Outperform	$61.74B	13.55	13.73%	7.18%	1.04%	22.31%
KMI	73 Outperform	$60.84B	23.67	8.43%	4.25%	2.02%	5.40%
WMB	71 Outperform	$71.99B	31.63	18.32%	3.39%	8.63%	-20.98%
Sector *	58 Neutral	$7.43B	3.43	-4.49%	10.08%	0.81%	-49.42%

Williams Co Corporate Events

Williams Co Announces New CEO Appointment

On May 5, 2025, The Williams Companies, Inc. announced that Chad J. Zamarin will become the new President and CEO, effective July 1, 2025, succeeding Alan S. Armstrong, who will transition to Executive Chairman of the Board. This leadership change is part of a strategic succession plan, with Zamarin expected to continue advancing the company’s natural gas-focused strategy and clean energy initiatives, ensuring ongoing growth and adaptation in the evolving energy landscape.

Williams Co Holds Annual Stockholders Meeting

On April 29, 2025, The Williams Companies, Inc. held its Annual Meeting of Stockholders where several key proposals were voted on. Stockholders elected eleven director nominees for a one-year term, approved the compensation of named executive officers on an advisory basis, and ratified Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions are expected to maintain the company’s governance and financial oversight, ensuring continuity in its strategic direction.

Williams Co Appoints New Executive Vice President

On April 24, 2025, Williams Co. announced the appointment of Larry Larsen as Executive Vice President and Chief Operating Officer, effective May 3, 2025. Larsen, who has been with the company since 1999, brings extensive experience in various leadership roles, including his recent position as Senior Vice President of Gathering and Processing. His appointment is expected to ensure a seamless transition and continuity in leadership, enhancing Williams’ competitive advantage and supporting its long-term growth strategy.

Williams Co Announces COO Retirement in 2025

On March 13, 2025, Williams announced that Micheal G. Dunn, Executive Vice President and Chief Operating Officer, will retire on May 2, 2025. During his tenure, Dunn transformed the company into a cohesive operating entity, completed significant infrastructure projects, and enhanced regulatory compliance, positioning Williams to continue its natural gas-focused strategy. Efforts are underway to find a suitable successor, with Dunn participating in the process.