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On Wednesday, Wells Fargo (NYSE:WFC) sustained its positive stance on Williams Companies (NYSE:WMB), with a maintained Overweight rating and an increased price target from $64.00 to $67.00. Wells Fargo’s analysts underscored the company’s robust growth potential as the primary reason for the heightened target. The stock, currently trading near its 52-week high of $61.66, has delivered an impressive 53.76% return over the past year according to InvestingPro data.
The analysis presented by Wells Fargo indicates that Williams Companies is currently trading at a premium compared to its C-Corp peers, based on 2026 estimated EV/EBITDA multiples—11.9x for Williams versus 10.8x for its peers. However, the analysts argue that this premium is justified given Williams’s superior growth prospects. They estimate that Williams can achieve an 11% three-year compound annual growth rate (CAGR) in EBITDA, which far exceeds the C-Corp median of 6%. Supporting this growth narrative, InvestingPro data shows the company has maintained strong revenue growth of 9.13% over the last twelve months, while consistently raising dividends for 7 consecutive years with a current yield of 3.33%.
Wells Fargo’s assessment suggests that if Williams Companies and its peer group were to align at the same multiple by the third year, Williams should command a 1.5x premium over the current 1.1x. This adjustment reflects an approximate 10% upside in the company’s stock price.
The analysts further elaborated that given Williams’s likelihood of sustaining a high growth rate beyond the three-year mark, the projected 1.5x premium might actually be a conservative estimate. This perspective reinforces the rationale behind the revised price target, as the company’s growth trajectory appears to warrant a larger premium than it currently has in the market.
In other recent news, Williams Companies reported their first-quarter 2025 financial results, exceeding analysts’ expectations. The company posted earnings per share of $0.60, surpassing the forecast of $0.58, and reported revenue of $3.05 billion, which was above the expected $2.83 billion. Despite these strong results, CFRA downgraded Williams Companies from Buy to Hold due to valuation concerns, maintaining a price target of $62.00. Meanwhile, RBC and Raymond (NSE:RYMD) James reiterated their positive outlooks, with RBC maintaining an Outperform rating and Raymond James raising the price target to $64.00.
The company’s strategic initiatives, such as the Socrates project, were highlighted as key drivers of growth. Stifel analysts also raised their price target to $63.00, citing Williams Companies’ strong first-quarter results and an increase in 2025 EBITDA guidance. Williams Companies continues to advance its natural gas strategy with projects like Power Express and anticipates benefiting from increased natural gas demand. The firm’s dividend yield stands at 3.3%, and it recently announced a 5.3% increase in its quarterly dividend. These developments underscore the company’s robust financial performance and strategic positioning in the energy sector.
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