WMB — The Williams Companies, Inc.

Sentiment is firmly bullish thanks to a Q2 2026 beat, adjusted EBITDA of $1.921B (up 6% YoY), a $200M raise to FY2026 EBITDA guidance, and the closed $5.5B Momentum Midstream acquisition. The $5.34B Power Innovation JV with Blackstone, KKR, and Apollo also positions WMB directly in the AI/data-center power theme. Analysts have been raising targets (Wells Fargo $90, Truist $88, RBC $87, Morgan Stanley up to $99-$103), while the technical picture is constructive but not overbought, with RSI at 54.74 as of 2026-08-27.

Revenue has inflected upward from the 2024 trough: Q2 2026 revenue rose 10.2% YoY to $3.053B, and operating income jumped 33% YoY to $1.182B. More importantly, margins expanded structurally: operating margin went from roughly 30% in 2024 Q2 to 38.7% in Q2 2026, with Q1 2026 hitting 43.6%. Net income in Q2 2026 was $827M versus $546M a year earlier, up 51%, and EPS improved from $0.45 to $0.68 YoY. This is acceleration driven by operating leverage on fee-based contracted volumes, not just a one-quarter blip. The main strain is below the operating line: capex spiked in Q4 2025 and Q2 2026, producing negative free cash flow of -$485M and -$458M, respectively, even as operating cash flow stayed steady around $1.4-$1.6B per quarter.

Expensive relative to its own history. At $74.19, trailing P/E is 29.44x versus the 5-year average of 22.32x, and P/S is 7.44x versus the 5-year average of 4.59x. Using the next-fiscal-year EPS estimate of $2.452, the forward P/E is roughly 30x. On EV/EBITDA, WMB trades around 14x guided 2026E EBITDA of $8.4B. That is a premium multiple, justified only if the 11%+ EBITDA CAGR target through 2030 and the AI-power/LNG buildout actually materialize. The 2.84% dividend yield provides modest income support but not valuation cushion.

The market is pricing in growth that has not yet fully shown up in TTM earnings. WMB is at ~29x trailing EPS and ~30x forward consensus EPS, yet the next-fiscal-year EPS estimate of $2.452 is actually below TTM EPS of $2.511. That means the stock is not cheap on current earnings; it is being valued on 2027-2028 data-center power and LNG-driven cash flow. If management delivers the $8.4B EBITDA guidance and continues compounding at 11%+, the multiple can hold. If execution slips or AI power demand cools, the de-rate back toward the historical 22x P/E would imply meaningful downside.

As of 2026-08-27, RSI stood at 54.74, a neutral reading. Price was 2.46% above the 20-day SMA, 1.08% above the 50-day SMA, and 6.41% above the 200-day SMA, so the trend is up but not extended. There is no oversold entry signal; support is roughly $72.40 near the 20-day and $73.40 near the 50-day, with the 200-day near $69.70 as a bigger trend-defining level. The tape favors holding existing positions, while new buyers would likely get a better entry on a pullback toward the 50-day or 200-day area.

• AI/data-center electricity demand is creating a new, contracted source of natural gas demand through behind-the-meter power projects.
• Gulf Coast LNG export expansion continues to pull record gas volumes through WMB's Transco corridor.
• Natural gas price/weather volatility affects near-term sentiment, though WMB's fee-based, take-or-pay contracts mute direct commodity exposure.
• Interest rates are a key swing factor: high leverage (D/E 2.34x) and long-duration cash flows make the stock sensitive to rate expectations.
• Regulatory approval and permitting timelines for pipeline expansions remain a persistent execution variable.

• Q3 2026 earnings in early November: early Momentum Midstream integration results and any further guidance increase.
• Socrates Phase 2 completion targeted for Q4 2026 and deployment of the $5.34B Power Innovation JV capital.
• Transco expansion milestones such as Leidy Access and Power Express, plus Gulf Coast LNG terminal ramp-ups.
• Continued analyst target revisions after the Q2 beat and strategic announcements.

• High leverage: long-term debt of $28.1B, debt-to-equity of 2.34x, and current ratio of 0.48x leave limited balance-sheet cushion.
• Negative free cash flow in Q4 2025 and Q2 2026 due to elevated growth capex; if projects don't convert to cash flow, dividend coverage becomes a concern.
• Momentum Midstream integration risk: the $5.5B acquisition must deliver synergies and Haynesville growth as modeled.
• Valuation de-rate risk: at ~29x trailing versus the 5-year average of 22.3x, any AI-power/LNG demand disappointment could compress the multiple sharply.

WMB is a quality, fee-based natural gas midstream franchise with real structural tailwinds from LNG exports and data-center power demand. But at $74.19, the market is already paying a premium for that growth, and the balance sheet is stretched by heavy capex and the Momentum deal. I lean cautiously bullish: it is a hold/accumulate-on-weakness rather than a fresh chase, with the investment case depending on disciplined execution of the 11%+ EBITDA growth plan.

Calculated by applying a 15.0x EV/2026E EBITDA multiple (premium to WMB's historical/peer range, justified by the 11%+ EBITDA CAGR target and contracted midstream cash flows) to guided adjusted EBITDA of $8.4B, subtracting net debt of roughly $27.9B ($28.1B long-term debt less $0.2B cash), and dividing by approximately 1.22B shares, yielding about $80.20 and rounded to $80.00.