JPMorgan analyst Jeremy Tonet maintained an Overweight rating on Williams Companies (NYSE:WMB) on Tuesday, setting a price target of $66.00. With a market value of $73.8 billion, the company is currently trading close to its 52-week high of $61.66. Tonet’s updated forecast for the first quarter of 2025 shows an adjusted EBITDA of $1,970 million, surpassing both the Street’s median estimate of $1,910 million and JPMorgan’s prior estimate of $1,899 million.
According to InvestingPro, Williams Companies appears to be trading above its fair value, but maintains strong financial health. Tonet’s analysis attributes part of this strength to the company’s Transco rates and the Southside Reliability Enhancement project, which adds 423 million cubic feet per day to its capacity. This expansion is expected to contribute $892 million in adjusted EBITDA from the Transcontinental Gas Pipe Line (TGoM) segment, a $67 million increase from the previous quarter.
Williams Companies’ consistent performance is also reflected in its impressive 52 consecutive years of dividend payments. The Western operations are forecasted to generate $384 million in adjusted EBITDA, an increase of $39 million from the previous quarter, driven by the recent Rimrock acquisition.
In the Northeast Gathering & Processing (G&P) segment, the company anticipates stable production with an adjusted EBITDA of $501 million. The Gas & NGL Marketing segment is projected to bring in $120 million, following typical seasonal patterns but showing a decline of $69 million from the previous year, largely due to a lack of significant weather events. The ‘Other’ category, including the Wamsutter joint venture, is expected to contribute $71 million.
Looking toward the full year of 2025, JPMorgan projects an adjusted EBITDA of $7,721 million for Williams Companies, slightly ahead of the previous estimate of $7,687 million and the Street’s median of $7,659 million. The analyst expects the company’s earnings call to highlight early project in-service opportunities, a potential rate increase from Transco, and greater activity in dry-gas G&P.
Tonet also predicts that Williams will discuss its Will-Power™ initiative, which includes the proposed 200 MW Socrates North and South behind-the-meter (BTM) power generation projects in Ohio. The company is exploring additional BTM solutions with a goal of reaching 1 gigawatt of projects by 2027. Additionally, discussions about Northeast pipeline infrastructure, including the Constitution Pipeline, are expected to underscore the need for permitting reforms.
Williams Companies has recently completed two major pipeline expansion projects: the Southeast Energy Connector in Alabama and the Texas to Louisiana Energy Pathway. These expansions aim to address growing U.S. natural gas demand, with the Texas-Louisiana pathway boosting capacity by 364 million cubic feet per day and the Southeast Energy Connector adding 150 million cubic feet per day.
S&P Global Ratings has upgraded Williams Companies to a ‘BBB+’ credit rating, citing strong credit metrics and continued growth. The company closed fiscal-year 2024 with an adjusted EBITDA of approximately $7.0 billion, with S&P projecting growth to $7.6 billion-$7.7 billion in 2025.
Leadership changes are also underway, with Executive Vice President and COO Michael Dunn set to retire in May 2025. Analysts at Raymond James and Stifel have both maintained positive ratings for Williams Companies, with price targets of $62. Raymond James highlighted the company’s $1.6 billion investment in natural gas and power infrastructure, while Stifel emphasized Williams’ focus on AI data centers and LNG demand.
Williams Companies remains well-positioned for future growth, driven by a strong balance sheet and strategic acquisitions.
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