TD Cowen initiates Williams Companies stock with Buy rating on natural gas demand growth

Investing.com - TD Cowen has initiated coverage on Williams Companies (NYSE:WMB), a $71.6 billion market cap natural gas infrastructure company, with a Buy rating and a price target of $67.00 on Monday. The stock currently trades at $58.64, with a 3.41% dividend yield.

The research firm cited Williams Companies’ advantageous positioning to capitalize on U.S. natural gas demand growth, particularly through its Transco asset that runs through the U.S. Gulf Coast and Southeast regions. According to InvestingPro, the company has demonstrated strong performance with 9.13% revenue growth and maintains low price volatility, making it an attractive option for stable returns.

TD Cowen expects Williams Companies to announce additional growth opportunities beyond those already sanctioned, with analysts incorporating $0.6 billion from visible opportunities into their valuation model.

The firm sees this growth supporting a $74 net present value (NPV) of free cash flow (FCF) should these opportunities materialize as anticipated.

TD Cowen’s $67 price target is based on a balanced valuation methodology that weighs EBITDA and free cash flow metrics equally in a 50/50 approach. This target aligns with the broader analyst consensus, with targets ranging from $43 to $74 per share.

In other recent news, Williams Companies has been the subject of several analyst reports highlighting its financial and strategic developments. UBS has maintained a Buy rating on the company with a $74 price target, noting an expected decrease in earnings due to higher operating expenses but anticipating stronger contributions from its Transmission & Gulf of Mexico sectors. The firm also projects a decline in its Gas & NGL Marketing Services for the second quarter of 2025. Meanwhile, Wolfe Research upgraded Williams Companies from Underperform to Peerperform, citing a growth inflection that supports the company’s premium valuation. This upgrade reflects Williams’ strategic positioning to capitalize on emerging opportunities in the energy sector. Additionally, Mizuho (NYSE:MFG) reaffirmed its Outperform rating with a $67 price target, pointing to potential cash flow benefits from recent legislative developments and ongoing pipeline initiatives. Wells Fargo (NYSE:WFC) also maintained an Overweight rating, raising its price target to $67 due to Williams’ robust growth potential and superior growth prospects compared to its peers. The company continues to advance its Northeast pipeline projects, including the NESE and Constitution projects, which could serve as positive regulatory catalysts.

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