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On Tuesday, Raymond (NSE:RYMD) James analyst Justin Jenkins adjusted the price target for Williams Companies (NYSE:WMB) slightly upward to $64 from $63, while reaffirming the Outperform rating for the stock. The new target represents potential upside from the current price of $58.13, with the stock trading near its 52-week high of $61.66. Jenkins highlighted the company’s consistent execution of a robust operational strategy, which includes maintaining operating leverage, pursuing organic growth with high returns, and remaining open to opportunistic acquisitions. The company’s leverage ratio is expected to decrease from approximately 3.8x to below around 3.65x. According to InvestingPro data, WMB has demonstrated strong momentum with a 60.28% return over the past year.
Williams Companies’ valuation reflects its premium characteristics, with an anticipated enterprise value to EBITDA (EV/EBITDA) multiple of around 11 times for the year 2027 and a solid dividend growth rate of over 5%. Current InvestingPro data shows the company has maintained dividend payments for 52 consecutive years, with an impressive 11.73% dividend growth in the last twelve months. These metrics underscore the market’s valuation focus extending towards the latter part of the decade. Jenkins reiterated the Outperform rating, emphasizing the company’s positive long-term outlook.
In their 1Q25 recap, Williams Companies reported mixed results. The company’s adjusted EBITDA was $1.989 billion, surpassing both Raymond James and Street estimates, which were $1.915 billion and $1.945 billion, respectively. While the headline figure was strong, the quality of earnings was subject to debate, with significant contributions from the Gas & NGL Marketing and Other/Upstream segments. These segments outperformed Raymond James’ expectations, contributing to the overall beat.
However, the Transmission & Gulf of Mexico (GOM) and West segments did not meet Raymond James’ projections, posting slight misses. The Northeast G&P’s performance was consistent with expectations. Additionally, Williams Companies’ available funds from operations (AFFO) of $1.445 billion exceeded the Raymond James estimate of $1.360 billion. The company’s pre-announced dividend per share of $0.50 aligned with predictions.
The report comes amid market anticipation regarding the company’s CEO transition and updates on power operations, which were likely focal points for investors following the earnings release. The market’s response to these developments will continue to shape the outlook for Williams Companies’ stock.
In other recent news, Williams Companies reported impressive financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved earnings per share (EPS) of $0.60, exceeding the forecasted $0.58, and reported revenue of $3.05 billion, which was higher than the expected $2.83 billion. Despite these strong results, the company’s stock experienced a decline in after-hours trading. In addition to the earnings report, Williams Companies announced a 5.3% increase in its quarterly dividend, reflecting its commitment to returning value to shareholders. The company’s adjusted EBITDA guidance midpoint was raised to $7.7 billion for 2025, indicating a 9% growth from the previous year. S&P Global Ratings upgraded Williams’ credit rating to BBB+, highlighting the company’s strong financial position. These developments underscore Williams’ consistent performance and strategic positioning in the natural gas infrastructure sector.
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