What Do Williams’ Expansion Moves Mean for Its True Value in 2025?

• Thinking about Williams Companies and whether its stock is a bargain? You are not alone. Let us dig into what the company might really be worth.
• Williams is up 1.0% over the last week, 5.7% over the past month, and is sporting a 7.8% gain year-to-date. These numbers show steady interest and prompt questions about its growth prospects.
• This climb comes as the company announced key infrastructure expansions and completed a major strategic acquisition. Both moves have drawn investor attention and could shape Williams' long-term outlook. Headlines have focused on how these changes might unlock further value and support the company's ambitious growth plans.
• Interestingly, Williams Companies scores just 1 out of 6 on our undervaluation checks. This suggests the market may have already priced in some of this excitement. Next, we will break down how valuation is measured, and at the end, we will point you to the approach we think gives the clearest answer.

Williams Companies scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Williams Companies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s value by forecasting future cash flows and discounting them to their present value. This approach helps investors determine whether a stock is trading below or above its intrinsic worth based on projected performance.

For Williams Companies, the latest reported Free Cash Flow stands at $2.28 billion. Analyst projections show steady growth, with Free Cash Flow expected to reach approximately $4.22 billion by the end of 2029. Beyond these five-year estimates, future cash flows are extrapolated and result in a total ten-year projection supported by detailed analyst data and long-term assumptions.

Factoring in these cash flows, the DCF analysis calculates an intrinsic value of $71.71 per share. Compared to the current trading price, this represents a 16.0% discount. This finding suggests that Williams Companies’ stock is undervalued according to cash flow fundamentals.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Williams Companies is undervalued by 16.0%. Track this in your watchlist or portfolio, or discover 922 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Williams Companies.

Approach 2: Williams Companies Price vs Earnings

The price-to-earnings (PE) ratio is a popular and relevant metric for valuing profitable companies like Williams Companies because it directly relates a company’s share price to its underlying earnings. Since Williams is firmly in the black, the PE ratio provides a straightforward way to gauge how much investors are willing to pay for each dollar of profit.

It is important to note that what counts as a fair PE ratio depends on future growth potential and risk. Companies expected to grow faster or with lower perceived risk usually command higher PE multiples, while those with slower growth or higher risk tend to have lower ratios. This context is especially relevant in the oil and gas industry, where market dynamics can quickly shift.

Currently, Williams Companies is trading at a PE ratio of 31.07x, which is substantially higher than the industry average of 13.30x and the average for peers at 14.70x. At first glance, this might indicate overvaluation. However, Simply Wall St’s proprietary "Fair Ratio" for Williams is 21.83x. The Fair Ratio is more insightful because it factors in not just earnings, but also growth outlook, profit margins, business risks, industry nuances, and overall company size. This holistic approach allows investors to see past crude comparisons with industry or peer averages and instead focus on the company’s individual strengths and challenges.

Comparing Williams’ actual PE ratio (31.07x) to its Fair Ratio (21.83x) shows the stock is currently trading above what would be considered reasonable for its profile, hinting at a premium price.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1441 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Williams Companies Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives, a fresh and powerful approach that lets you connect your personal view of a company to its financial future and fair value in just a few clicks.

A Narrative is your own story about a company, but expressed with numbers. You set your assumptions for Williams Companies’ future revenue, earnings, and profit margins, then instantly see the fair value that fits your perspective.

By tying together the company’s journey, your forecasts, and the resulting valuation, Narratives transform how you interpret investment opportunities. This approach turns static analysis into a dynamic, living assessment that evolves as real-world news and data are updated.

Narratives are accessible to every investor on Simply Wall St’s Community page, used by millions to frame buy and sell decisions. Simply compare your Narrative-based fair value to the current market price for a tailored signal on whether to act or wait.

For Williams Companies, you might see one Narrative bet on strong growth from new energy projects and assign a fair value as high as $74, while another, more cautious Narrative expects regulatory hurdles and slower profit expansion, resulting in a fair value closer to $44. This helps you understand both the optimism and the risks through the numbers that matter most to you.

Do you think there's more to the story for Williams Companies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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