tiprankstipranks
Trending News
More News >
Williams Co (WMB)
NYSE:WMB

Williams Co (WMB) AI Stock Analysis

Compare
2,445 Followers

Top Page

WM

Williams Co

(NYSE:WMB)

Rating:71Outperform
Price Target:
$65.00
â–²(9.91%Upside)
Williams Co receives an overall stock score of 70.9, driven primarily by strong financial performance and positive earnings call insights. While the technical analysis presents mixed signals, the company's strategic initiatives and leadership changes contribute positively to its outlook. The valuation remains a concern due to a high P/E ratio, but the dividend yield provides some compensation for investors.
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 Investments
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
Financial Risk
The leverage ratio has increased slightly, which may signal higher financial risk.
Leadership Changes
WMB shares were weak post the print, which we largely attribute to the unexpected CEO transition.
Reinvestment Limitations
Free cash flow after dividends is relatively low, which could limit reinvestment opportunities.

Williams Co (WMB) vs. SPDR S&P 500 ETF (SPY)

Williams Co Business Overview & Revenue Model

Company DescriptionThe 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 MoneyWilliams 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 Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: -0.89%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth and strategic project advancements, particularly in data center power solutions and pipeline expansions. Despite some challenges in maintenance and marketing segment declines, the overall trajectory remains positive with robust returns and strategic investments.
Q1-2025 Updates
Positive Updates
Strong First Quarter Performance
Williams reported a 9% growth in the first quarter, driven by high return projects and improved credit ratings. The company anticipates continued growth with strong base business performance.
Data Center Power Solutions
Williams announced the Socrates project, investing $1.6 billion in data center power solutions with a 10-year fixed price power purchase agreement, expected to deliver earnings with a 5x EBITDA multiple.
Transco's Power Express Pipeline
The 950 million cubic feet per day expansion project in Virginia is backed by a significant anchor shipper and uses existing infrastructure, promising robust demand and high returns.
Record Adjusted EBITDA Growth
Adjusted EBITDA increased by 3% over the first quarter of 2024, with expectations of accelerating growth each quarter throughout 2025.
Deepwater Projects Progress
Completion of two deepwater projects, Whale and Ballymore, contributing significant earnings growth, with more projects expected to drive cash flows in the third quarter.
Credit Rating Upgrade
Williams received an S&P credit rating upgrade to BBB Plus and a positive outlook from Moody's, reflecting its robust business model and balance sheet strength.
Increased Dividend
Williams raised its quarterly dividend by 5.3% to $0.50 per share, reinforcing its commitment to a well-covered dividend program.
Negative Updates
Challenges in Gulf Maintenance
The Gulf segment faced maintenance and producer issues, although overall Gulf gathering volumes increased by 12%.
Decline in Marketing Segment EBITDA
The Sequent Marketing business saw a decrease of $34 million in EBITDA compared to the first quarter of 2024.
Aux Sable Divestiture Impact
The Northeast G&P business was unfavorably impacted by the Aux Sable divestiture, despite a 6% sequential volume increase.
Company Guidance
During the Williams First Quarter 2025 Earnings Conference Call, the company provided an optimistic outlook for its future growth, highlighting several key metrics. CEO Alan Armstrong announced a 9% growth in earnings for the year, with a strong base business performance. Williams raised its adjusted EBITDA guidance midpoint by $50 million to $7.7 billion and increased capital expenditure by $925 million, reflecting new projects like the $1.6 billion Socrates project. The company also reported an S&P credit rating upgrade to BBB Plus and a positive outlook from Moody's. Armstrong highlighted high return projects with a 5x EBITDA build multiple and noted the completion of projects like the Southeast Energy Connector and Texas to Louisiana Energy Pathway. Additionally, Williams increased its quarterly dividend by 5.3% to $0.50 per share, marking the 37th consecutive quarter of meeting or beating consensus.

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
72
Positive
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
68
Positive
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
75
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue10.91B10.50B10.91B10.96B10.63B7.72B
Gross Profit7.07B8.43B6.80B3.68B3.21B3.06B
EBITDA5.96B6.65B7.77B5.70B5.09B4.58B
Net Income2.28B2.23B3.18B2.05B1.52B211.00M
Balance Sheet
Total Assets48.94B54.53B52.63B48.43B47.61B44.16B
Cash, Cash Equivalents and Short-Term Investments477.00M60.00M2.15B152.00M1.68B142.00M
Total Debt24.41B26.94B26.46B22.90B23.68B22.34B
Total Liabilities34.61B41.74B37.74B34.39B33.51B29.58B
Stockholders Equity11.79B12.44B12.40B11.48B11.42B11.77B
Cash Flow
Free Cash Flow2.10B2.40B3.37B2.61B2.70B2.22B
Operating Cash Flow5.17B4.97B5.94B4.89B3.94B3.50B
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
Neutral
Last Price59.14
Price Trends
50DMA
59.16
Negative
100DMA
57.92
Positive
200DMA
55.16
Positive
Market Momentum
MACD
0.49
Positive
RSI
46.34
Neutral
STOCH
40.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMB, the sentiment is Neutral. The current price of 59.14 is below the 20-day moving average (MA) of 60.07, below the 50-day MA of 59.16, and above the 200-day MA of 55.16, indicating a neutral trend. The MACD of 0.49 indicates Positive momentum. The RSI at 46.34 is Neutral, neither overbought nor oversold. The STOCH value of 40.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WMB.

Williams Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
OKOKE
81
Outperform
$51.31B16.0416.04%5.01%40.55%19.24%
81
Outperform
$51.85B11.7332.54%7.53%5.53%11.29%
ETET
79
Outperform
$61.12B13.4113.73%7.36%1.04%22.31%
EPEPD
75
Outperform
$67.60B11.7120.49%6.81%9.10%4.37%
KMKMI
73
Outperform
$62.95B24.498.43%4.11%2.02%5.40%
WMWMB
71
Outperform
$71.70B31.5018.32%3.40%8.63%-20.98%
67
Neutral
$14.88B9.776.38%5.30%4.12%-66.77%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WMB
Williams Co
59.14
18.18
44.38%
ET
Energy Transfer
17.90
2.87
19.10%
EPD
Enterprise Products Partners
31.44
4.38
16.19%
KMI
Kinder Morgan
28.50
9.51
50.08%
OKE
Oneok
82.14
3.54
4.50%
MPLX
MPLX
51.05
11.78
30.00%

Williams Co Corporate Events

Private Placements and Financing
Williams Co Announces $1.5 Billion Senior Notes Offering
Neutral
Jun 30, 2025

On June 26, 2025, Williams Co announced the pricing of a $1.5 billion public offering of senior notes, with $750 million due in 2030 and another $750 million due in 2035. The proceeds from this offering are intended to repay near-term debt maturities and support general corporate purposes, potentially impacting the company’s financial stability and market position.

The most recent analyst rating on (WMB) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Williams Co stock, see the WMB Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Williams Co Announces New CEO Appointment
Positive
May 5, 2025

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.

Shareholder Meetings
Williams Co Holds Annual Stockholders Meeting
Neutral
May 2, 2025

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.

Executive/Board ChangesBusiness Operations and Strategy
Williams Co Appoints New Executive Vice President
Positive
Apr 24, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 02, 2025