WMB — The Williams Companies, Inc.

Sell-side sentiment is clearly positive: 27 Buy ratings against 7 Holds and no Sells, with a $87.64 consensus target and a recent-average target of $89.44. The fundamental news flow backs that up — the 2026-08-03 guidance raise to $8.4B EBITDA and the 2026-09-03 close of the $5.5B Momentum Midstream deal. The tape disagrees with the enthusiasm: as of 2026-09-13 the stock is −1.75% over one week, −1.15% over one month and −0.67% over six months with RSI at 47.2. The gap is valuation — at 28.9x trailing earnings and 7.3x sales versus 22.3x and 4.6x five-year averages, buyers have stopped paying up even while analysts keep lifting targets.

Revenue has ground steadily higher, from $2.559B in Q3 2023 to $3.053B in Q2 2026, with YoY growth of +10.2% in Q2 2026 (vs. $2.770B), +16.6% in Q4 2025 and +10.2% in Q3 2025 — a consistent low-double-digit cadence rather than a spike. The bigger story is margin: operating margin went 29.8% in Q2 2024 → 32.0% in Q2 2025 → 38.7% in Q2 2026, and Q1 2026 hit 43.6% versus 35.9% a year earlier. Net income and diluted EPS are inflecting hard (+51% YoY to $827M/$0.68 in Q2 2026; +25% to $865M/$0.71 in Q1 2026), though Q4 2023's $1.138B net income on only $1.087B of operating income was a one-off distortion, not a trend signal. The counterweight is capex: it has gone from ~$0.7B/quarter in 2024 to $1.834B in Q2 2026, pushing free cash flow to −$458M in Q2 2026 and −$485M in Q4 2025 even as operating cash flow holds steady near $1.38-1.60B/quarter. That is a deliberate growth-investment cycle, not deterioration — but it does mean reported FCF currently understates the earnings trend.

As of 2026-09-13, WMB at $72.85 trades at 28.9x trailing EPS of $2.511 versus a 22.32x five-year average P/E — roughly a 29% premium to its own history — and 7.30x sales versus a 4.59x five-year average. PEG of 1.112 is the one genuinely reasonable datapoint. Forward math is unhelpful: consensus next-FY EPS of $2.464 is actually below trailing EPS, implying a ~29.6x forward P/E with no near-term earnings step-up to justify it. On the metric midstream is actually valued on, ~$119B of enterprise value against $8.4B of guided 2026 EBITDA is ~14x, versus midstream peers generally at 9-12x. Verdict: expensive relative to both its own history and peers; the premium is a bet on the 2027-2029 power/LNG EBITDA ramp rather than on anything already contracted.

The price is not tracking next-twelve-month earnings — it is tracking a multi-year narrative. Consensus FY+1 EPS of $2.464 sits below TTM EPS of $2.511, so anyone buying on an EPS-growth basis is paying more for less. What the market is actually discounting is EBITDA: management raised FY26 adjusted EBITDA guidance to $8.4B on 2026-08-03, and the 2026-09-03 Momentum Midstream close plus the Q4 2026 Socrates Phase 2 startup set up a visibly higher 2027 run-rate. Rising depreciation from the $1.8B/quarter capex program will keep GAAP EPS suppressed even as EBITDA grows, so an EPS miss should not be read as a thesis break. Watch adjusted EBITDA, project FIDs, and gathered/transported volume growth — not the EPS line.

As of 2026-09-13, RSI(14) was 47.2 — squarely neutral, neither overbought nor oversold — with the price at $72.85 sitting 1.14% below its 20-day SMA and 0.62% below its 50-day, but 3.41% above its 200-day (roughly $70.5 by back-calculation). Read: a mild consolidation inside a longer uptrend, with the 200-day as the line that matters. A six-month return of −0.67% and a 52-week range of $56.19-$80.08 say the stock has been range-bound between roughly $70 and $80 since spring. There is no technical urgency to buy here; a pullback into the $68-$70 zone near the 200-day would offer materially better risk/reward than chasing into the top of the range.

• AI/data-center electricity demand is the core structural tailwind — utilities are turning to natural gas for fast, scalable baseload power, which directly feeds Williams' Power Innovation framework, Power Express, and behind-the-meter projects.
• US LNG export growth continues to pull gas southward, giving outsized strategic value to Williams' Haynesville gathering and Transco Gulf Coast corridors and supporting long-term contracted volume growth.
• Interest rates / cost of capital: WMB carries $28.1B of long-term debt and priced $2.75B of senior notes in early September 2026; a higher-for-longer rate environment raises the hurdle for capital-intensive midstream and makes the 2.85% dividend yield less competitive versus risk-free alternatives.
• Northeast permitting and regulatory risk — a recent court setback revoking a key environmental permit for a regional expansion shows state-level opposition can still delay or kill accretive Transco-adjacent projects.
• Natural gas price and production volatility: revenue is predominantly fee-based and take-or-pay, but gathering volumes and processing spreads retain some commodity sensitivity if Haynesville or Appalachia drilling decelerates.

• Q3 2026 earnings (expected late October/early November 2026) — the first full financial look at the newly integrated Momentum Midstream assets and any further update to the $8.4B FY26 adjusted EBITDA run-rate.
• Socrates Phase 2 completion in Q4 2026, plus further project FIDs and deployment of the $5.34B Blackstone joint venture capital into power and data-center connectivity projects.
• Momentum Midstream integration delivering Haynesville volumes into Gulf Coast LNG export and gas-fired power demand, with potential follow-on guidance raises if volumes track ahead of plan.
• Resolution — or further adverse rulings — on the Northeast pipeline permitting case, which is currently a live negative overhang on the Transco expansion backlog.

• Valuation/multiple compression: 28.9x trailing P/E versus a 22.32x five-year average, 7.30x sales versus 4.59x, and ~14x EV/EBITDA versus midstream peers at 9-12x leaves little room for disappointment if growth expectations reset.
• Balance sheet and funding: debt-to-equity of 2.335 with $28.1B of long-term debt, a 0.477 current ratio, and $2.75B of new notes priced in September 2026 — leverage is rising to fund both the Momentum deal and a capex program running at ~$6.2B on a trailing-twelve-month basis.
• Persistent negative free cash flow (−$458M in Q2 2026, −$485M in Q4 2025) means the dividend and growth spend are currently funded by operating cash flow plus external capital; if project returns slip, that gets uncomfortable quickly.
• Low return on invested capital of 6.2% — barely at or below cost of capital — means the heavy growth capex has to be underwritten on faith in future contracted returns that have not yet shown up in ROIC.
• Regulatory/permitting risk in the Northeast and general state-level opposition to new gas infrastructure, plus rate and refinancing risk on a $28B+ debt stack.
• Demand-side concentration: the growth premium rests heavily on the AI/data-center and LNG offtake narrative; a slowdown in either would deflate the multiple faster than it would hit actual EBITDA.

WMB is a genuinely high-quality, fee-based midstream franchise with a real structural tailwind (gas-fired power for AI/data centers plus LNG exports) and an earnings trend that is inflecting up rather than down — Q2 2026 operating margin of 38.7% versus 32.0% a year earlier is not noise. But the stock already discounts a lot of that: 28.9x trailing earnings against a 22.3x five-year average, ~14x EV/EBITDA against peers at 9-12x, and consensus forward EPS below trailing EPS. This is a good business at a full price, and the six-month flat tape suggests the market agrees valuation is now the constraint. Own it for the 2.85% yield and contracted growth, not because it is cheap — directionally Neutral at $72.85, with better entry points likely nearer the 200-day around $70.

EV/EBITDA on forward EBITDA: I apply a 13.75x multiple — a premium to the 9-12x midstream peer group justified by the Transco franchise, the investment-grade balance sheet and the contracted power/LNG backlog, but a slight discount to the ~14x WMB trades at on 2026 numbers — to 2027E adjusted EBITDA of approximately $9.0B (the $8.4B FY26 guidance midpoint grown ~7%, with Momentum Midstream contributing a full year and Socrates Phase 2 online in Q4 2026). That produces $123.75B of enterprise value; subtracting roughly $30B of net debt ($28.1B long-term debt at 2026-06-30 plus the $2.75B September 2026 notes, less cash) and dividing by approximately 1.223B shares outstanding yields about $77 per share.