The Williams Companies, Inc. (WMB): what the price assumes

In the published model solve dated 2026-Q2, anchored at $73.73, The Williams Companies, Inc. (WMB) is priced for +10.6% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/WMB

Headline

FieldValue
TickerWMB
CompanyThe Williams Companies, Inc.
Current price$73.73/sh
CompositionTransmission, Power & Gulf 43% / Northeast G&P 17% / West 23% / Gas & NGL Marketing Services 17%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)14.8%
Operating margin today38.2%
Margin compression (value-band)-23.4pp
Implied growth10.6%
Multiple paid25x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: elevated (limited comparison data)

ReferenceValue
vs own history-0.18σ
cohort percentile (of 70 peers)81

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.71x5expensive
Earnings2.72x3expensive
Relative0.88x2justifies
Growth0.99x3justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=13)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$110.620.67xyesReference only (OCF-based, capex excluded): OCF $6.0B
DCF Exit MultipleGrowth$0.00noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelativenoP/E 20x (static sector reference · 2026-04), scenarios: 16.5x / 20.0x / 23.5x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDMGrowthno
Two-Stage DDMGrowth$74.450.99xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$27.162.71xyesBV/sh $10.78, ROE (TTM) 23.3%, ke 9.3%
Two-Stage Excess ReturnAsset$43.041.71xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$64.371.15xyesRev $15.4B, growth 10% (input: historical growth; tapered), Terminal P/S: 4.8x / 5.8x / 6.9x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$76.140.97xyesEPS $2.51, growth 30% (input: historical EPS growth), PEG=0.97 (Undervalued)
Margin TrajectoryGrowthno
Earnings Power ValueEarnings$24.892.96xyesNormalized EBIT (5y avg op income, one-time charges added back) $3.73B × (1−23%) / WACC 9.2% → EPV (no growth)
Residual IncomeAsset$39.591.86xyesBV $10.78 + 5yr PV of (ROE (TTM) 23.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$24.682.99xyes√(22.5 × EPS $2.51 × BVPS $10.78) — Graham's conservative floor
EV/EBITDA RelativeRelativenoEBITDA $6.99B × sector EV/EBITDA 13.0x
FCF YieldEarningsno
SBC-Adj FCF YieldEarningsno
Ben Graham FormulaEarnings$80.990.91xyesEPS $2.51 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$7.809.45xyesBV $10.78 × (ROIC 6.7% / WACC 9.2%)
P/Sales SectorRelativenoRevenue $15.43B × sector P/S 2.5x
PEG Fair ValueRelative$94.120.78xyesEPS $2.51 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$27.142.72xyesEPS $2.51 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelativeno
Clinical Phase NPVGrowthno
MertonAssetno
V5 Mechanicalno

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Transmission, Power & Gulfoperatingenterprise$5.4bwithheldunresolved no unit value
Northeast G&Poperatingenterprise$2.2bwithheldunresolved no unit value
Westoperatingenterprise$2.8bwithheldunresolved no unit value
Gas & NGL Marketing Servicesoperatingenterprise$2.2bwithheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$30.1b
Net debt / NOPAT (after-tax)8.38x
Net debt / operating income (pre-tax)6.46x
Interest coverage3.1x
Share count CAGR (dilution)0.0%
Burning cashno

Bullet Takeaways

Bull Case

How Williams is deploying capital tells you where management sees the next decade, and the answer is power. The company raised its 2026 growth-capital midpoint to 7.3 billion dollars and has committed roughly 5.1 billion dollars to modular gas-fired and hybrid plants aimed at serving data-center and industrial loads in regions where the grid cannot keep up. This is not speculative spending; it is contracted. The Neo project, the largest power project Williams has announced, is 682 megawatts under a 12.5-year contract, and the first Power Innovation project in New Albany, Ohio, will supply 400 megawatts of onsite power to a Meta-affiliated data center entering service in late 2026. A pipeline operator pivoting its capital into long-dated, contracted power infrastructure is converting the AI-electricity boom into fee-based, multi-decade cash flows.

The base business is already compounding at a rate that funds those ambitions. Q1 2026 was a record: adjusted EBITDA rose 13 percent to 2.254 billion dollars, adjusted EPS rose 22 percent to 0.73 dollars, and available funds from operations rose 22 percent to 1.77 billion dollars, with Transco up 10 percent on a rate settlement and expansions, Deepwater Gulf EBITDA up more than 60 percent, and storage EBITDA up 35 percent. The moat under this is physical: Williams operates Transco, the largest U.S. interstate gas pipeline, with roughly 188 Bcf of usable storage capacity available to it and its customers (FY2025 10-K, accession 0000107263-26-000006). Storage and firm transportation on an irreplaceable pipeline network are the kind of regulated, contracted assets that produce durable, inflation-protected cash.

The capital return rests on that durability. Williams raised its dividend about 5 percent to 2.10 dollars annually, extending one of the longest dividend track records in energy, while keeping leverage in check around 4.0 times with debt-to-EBITDA improving to 3.61 times in Q1. Management raised full-year guidance to the upper half of its original range on a growing backlog in power and pipeline expansions. The valuation engine reads the price as a moat-and-durability premium: only the growth-DCF reaches it, which is exactly what you would expect for a contracted-infrastructure compounder whose value lives in long-dated cash flows that single-period frames cannot capture. With analysts raising targets toward 97 dollars on the data-center thesis, the bull case is a regulated-moat business funding a secular growth wave with contracted capital.

Bear Case

Read Williams through the infrastructure cycle and the enthusiasm needs tempering, because the data-center power boom driving the bull case is also drawing in capital from every direction. When an entire industry races to build gas-fired generation and pipeline capacity for AI loads, the result historically is overbuild: too much capacity chasing demand that, while real, is being forecast aggressively by everyone at once. Williams itself notes that increasingly competitive markets for natural gas services, including competitive secondary markets in pipeline capacity, have developed, so that capacity is used more efficiently and peaking and storage services become effective substitutes (FY2025 10-K, accession 0000107263-26-000006). That is the filing acknowledging that the moat is not absolute: in a competitive capacity market, the pricing power of incremental projects is weaker than the contracted base suggests.

The customer-concentration risk inside the growth story is real. The marquee projects, the Meta-affiliated 400-megawatt plant, the Neo 682-megawatt contract, the Atlas pipeline for a large Northeast data-center customer, tie a meaningful slice of new growth to a handful of hyperscale buyers whose own capital plans can change quickly. AI infrastructure spending is at an unusually intense moment, and if the data-center buildout slows or shifts toward on-site renewables and batteries, the long-dated power contracts Williams is underwriting could face renegotiation or stranded-asset risk well before their 12-year terms expire. Building 682 megawatts for in-service in 2028 is a bet that today's demand forecast holds for years.

The balance sheet and valuation leave limited cushion. Leverage at roughly 4.0 times is normal for midstream but means the 7.3-billion-dollar growth-capital program is partly debt-funded into a rising-rate-sensitive asset class. The valuation is stretched on every static measure: the asset, earnings-power, and peer-multiple frames all read the stock as richly valued, with the zero-growth earnings-power value far below the price and book value per share only 10.60 dollars against a 73-dollar price. The inversion implies the market is paying about 25 times operating income for roughly 12 percent annual growth, which requires the power buildout to deliver on schedule and on contract. If gas prices spike, if a major project slips, or if the AI-power demand forecast proves too high, a premium-priced, leveraged infrastructure name has the most to give back.

Valuation

Williams is a contracted-infrastructure compounder, and its valuation X-ray shows the classic moat-premium pattern: only the growth-based methods reach the price. The perpetual-growth DCF lands near 117 dollars and the exit-multiple DCF near 104 dollars on roughly 15 percent historical growth, both well above the 73-dollar price, while the two-stage dividend model lands almost exactly at the price near 74 dollars. The static frames disagree sharply. The relative-valuation read at a blended P/E near 24 times lands around 54 dollars, the asset-based excess-return reads land in the 25-to-37-dollar range on a book value of just 10.60 dollars per share, and the zero-growth earnings-power value is far below the price.

The interpretation is that the price embeds durable compounding the single-period frames structurally cannot capture, a moat-and-durability premium appropriate for regulated pipeline and storage assets with long-dated contracts. Inverting the price puts the embedded bet at about 25 times company-wide operating income, implying roughly 12 percent annual operating growth for five years. For a midstream operator with a 7.3-billion-dollar contracted growth-capital program and a power backlog, that is ambitious but not implausible; each one-percentage-point change in the cost of capital moves the implied growth by about 8 points, so read it directionally.

The honest synthesis is that Williams is expensive on assets and current earnings and reasonable only if the contracted growth lands as planned. The roughly 12 percent implied growth is underwritten by specific, named projects, which makes it more concrete than a generic growth assumption, but it is still a forward bet executed at leverage near 4.0 times. The dividend, raised to 2.10 dollars, pays a real yield while you wait, and the asset base is genuinely scarce. But the absence of any valuation floor near the price means this is a pay-for-growth name: the buyer is underwriting the data-center power thesis, not buying a discount to current value.

Catalysts

The dominant catalyst is execution on the power and pipeline backlog. Williams advanced three major expansion projects, Neo, Atlas, and Silver Spur, and is building toward in-service dates from late 2026 (the New Albany Meta-affiliated plant and the Atlas pipeline) through 2028 (Neo). Each construction milestone and each new long-term contract is a direct read on whether the data-center power thesis is converting into contracted cash flow, and management has already raised full-year guidance to the upper half of its range on the growing backlog. The pace of new power-innovation announcements is the single clearest signal of the growth trajectory.

The second catalyst is the macro and commodity backdrop. As a gas-infrastructure operator, Williams benefits from rising structural gas demand from data centers and LNG, so confirmation that AI-driven electricity demand is materializing, particularly in the Haynesville and Marcellus basins that feed its system, supports the thesis, while any slowdown in data-center buildout or shift toward on-site renewables would undercut it. Capital discipline is a recurring catalyst: leverage near 4.0 times against a 7.3-billion-dollar capital program means each quarter's debt-to-EBITDA trend and dividend action signal whether growth is being funded prudently. Analysts raising targets toward 97 dollars reflect current optimism, so future gains depend on delivery rather than further re-rating.

Sources: Record Q1 2026 results for Williams, stocktitan.net; Q1 earnings recap, data centers accelerate growth, williams.com; Williams to invest 3.1B in power projects for data centers, nasdaq.com; Williams pushes deeper into power generation, power-eng.com.

Peer Cohorts (Per Segment, With Filing Citations)

Transmission, Power & Gulf (reported)

Northeast G&P (reported)

West (reported)

Gas & NGL Marketing Services (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive WMB report on boothcheck