Oklahoma-based The Williams Companies, Inc. (WMB) operates as an energy infrastructure company that produces, gathers, processes, and transports natural gas and natural gas liquids. Valued at a market cap of $69.3 billion, the company operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments.
Shares of this energy company have significantly outpaced the broader market over the past 52 weeks. WMB has rallied 65.8% over this time frame, while the broader S&P 500 Index ($SPX) has gained 22.6%. Moreover, on a YTD basis, the stock is up 5.1%, compared to SPX’s 2.7% rise.
Narrowing the focus, WMB has outperformed the Energy Select Sector SPDR Fund’s (XLE) 8.4% return over the past 52 weeks. However, it has lagged behind XLE’s nearly 5.8% gain on a YTD basis.
On Nov. 6, shares of WMB closed up 4.3% after its Q3 earnings release as the company delivered better-than-expected Q3 adjusted earnings of $0.43 per share and revenues of $2.7 billion, which met the Street’s forecast. Revenue increased by 3.8% overall, driven by strong performance in its Transmission & Gulf of Mexico and West segments coupled with higher service revenues. The company’s growth projects and strategic acquisitions aided the results. However, a weaker performance from the Northeast G&P segment resulted in a 4.4% year-over-year decline in its adjusted EPS.
The company delivered an EPS of $1.91 in fiscal 2023, and for fiscal 2024, which ended in December, analysts expect Williams’ EPS to remain flat year-over-year. The company’s earnings surprise history is promising. It surpassed the Wall Street estimates in each of the last four quarters.
Among the 20 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on nine “Strong Buy,” two “Moderate Buy,” eight “Hold,” and one “Strong Sell” rating.
On Feb. 4, RBC Capital analyst Elvira Scotto maintained a “Buy” rating on WMB and set a price target of $62, which indicates an 8.6% potential upside from the current levels.
The mean price target of $59.37 represents a 4% upside from WMB’s current price levels, while the Street-high price target of $70 suggests an upside potential of 22.7%.
