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On Tuesday, JPMorgan analyst Jeremy Tonet maintained an Overweight rating on Williams Companies (NYSE:WMB), with a consistent price target of $66.00. The company, currently valued at $73.8 billion, is trading near its 52-week high of $61.66. Tonet provided an updated outlook on the company’s financial performance, anticipating a $1,970 million adjusted EBITDA for the first quarter of 2025, which surpasses both the Street’s median estimate of $1,910 million and JPMorgan’s previous estimate of $1,899 million. According to InvestingPro analysis, WMB appears to be trading above its Fair Value, with a GOOD overall financial health score.
Tonet’s analysis indicates that Williams Companies’ Transco rates and the Southside Reliability Enhancement project, which adds 423 million cubic feet per day (mmcf/d) to its capacity, will contribute to a $892 million adjusted EBITDA in the Transcontinental Gas Pipe Line (TGoM) segment. This figure represents a $67 million quarter-over-quarter increase. The company, which has maintained dividend payments for an impressive 52 consecutive years, continues to demonstrate strong operational performance. Additionally, the company’s Western operations are expected to deliver $384 million, up $39 million from the previous quarter, bolstered by two months of production from the recent Rimrock acquisition.
In the Northeast Gathering & Processing (G&P) segment, a modest production ramp is predicted to yield a stable $501 million adjusted EBITDA. The Gas & NGL Marketing segment is forecasted to contribute $120 million, reflecting normal seasonal patterns but showing a $69 million year-over-year decline due to the lack of significant weather events. Lastly, the ’Other’ EBITDA category is projected to bring in $71 million, with the Wamsutter joint venture consolidation playing a key role.
Looking ahead to the full year of 2025, JPMorgan projects a $7,721 million adjusted EBITDA for Williams Companies, slightly above the prior estimate of $7,687 million and the Street’s median of $7,659 million. The analyst expects the company’s earnings call to focus on early project in-service opportunities, potential uplift from a Transco rate case, and increased dry-gas G&P activity.
Furthermore, JPMorgan anticipates that Williams Companies will discuss its Will-Power™ initiative, which involves the proposed Socrates North and South behind-the-meter (BTM) 200 megawatt (MW) power generation facilities in Ohio. The company is also evaluating additional BTM solutions, with a potential for 1 gigawatt (GW) of deals by 2027. Additionally, discussions regarding potential developments in Northeast pipeline infrastructure, such as the Constitution Pipeline, are expected to underscore the necessity for permitting reform.
In other recent news, Williams Companies has successfully commissioned two major pipeline expansion projects, the Southeast Energy Connector in Alabama and the Texas to Louisiana Energy Pathway. These expansions are designed to meet the increasing demand for natural gas in the United States, with the Texas to Louisiana Energy Pathway increasing capacity by 364 million cubic feet per day and the Southeast Energy Connector adding 150 million cubic feet per day. Additionally, S&P Global Ratings has upgraded Williams Companies to a ’BBB+’ credit rating due to strong credit metrics and continued growth. The company ended fiscal-year 2024 with an adjusted EBITDA of approximately $7.0 billion, and S&P forecasts an increase to $7.6 billion-$7.7 billion in 2025.
Williams Companies is also undergoing leadership changes, as Executive Vice President and COO Micheal Dunn is set to retire in May 2025. Meanwhile, Raymond (NSE:RYMD) James and Stifel have both reiterated positive ratings for Williams Companies, with price targets set at $62. Raymond James highlighted a $1.6 billion investment in natural gas and power infrastructure, while Stifel noted the company’s strategic focus on AI data centers and LNG demand. Williams Companies continues to position itself for future growth, supported by a strong balance sheet and strategic acquisitions.
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