Has Williams Companies Run Ahead of Its Value After Recent LNG Expansion Momentum?

If you are holding Williams Companies or thinking about adding it to your portfolio, you have good reason to pause and take stock (pun intended). In a market where energy infrastructure names can sometimes fly under the radar, Williams has quietly delivered robust long-term returns. Just look at the past five years: up more than 319.7%, easily outpacing many peers and benchmarks. Even over the last three years, the stock is up a remarkable 144.2%. Recent volatility also tells an interesting story, with a 6.6% climb over the past month, despite a brief 2.9% dip in the last week. The company’s year-to-date gain of 12.0% speaks to its enduring momentum, while its 28.4% rise over the past twelve months reflects growing market confidence and perhaps a shift in how investors perceive energy infrastructure risk overall.

Of course, impressive price performance is only one piece of the puzzle. What does it say about value? Our valuation scorecard gives Williams Companies a 1 out of 6, indicating it is undervalued in just one key area. That’s a helpful starting point, but as with any stock that has enjoyed such a strong run, the real question is whether there is more upside left or if the price reflects all the good news in advance. Let’s break down the different methods analysts use to assess valuation. Later, we will look at an approach that could provide even deeper insight.

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 the value of a business by forecasting its future cash flows and discounting them to today’s dollars using an appropriate rate. This approach essentially asks what Williams Companies’ stream of future cash is worth right now.

Currently, Williams Companies reports Free Cash Flow (FCF) of $2.21 billion. Analyst projections suggest steady growth, with FCF expected to reach $4.24 billion by 2029. While analysts typically provide forecasts for the next five years, additional estimates extending to 2035 are extrapolated by Simply Wall St to give a longer-term perspective.

Based on these cash flow projections, the estimated intrinsic value for Williams Companies is $68.87 per share. Since the DCF model indicates the stock is trading at a 9.1% discount to its fair value, Williams Companies appears to be priced about right compared to its intrinsic worth.

Result: ABOUT RIGHT

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

Story Continues

WMB Discounted Cash Flow as at Oct 2025

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Williams Companies's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Williams Companies Price vs Earnings

For companies that are consistently profitable, the Price-to-Earnings (PE) ratio is a widely used and sensible valuation metric. It tells investors how much they are paying for each dollar of current earnings, providing a snapshot of market expectation for growth and risk.

Growth prospects and business risks play a big role in what constitutes a “normal” or “fair” PE ratio for a stock. Higher anticipated earnings growth or stable, lower-risk operations can justify a higher PE, while slower-growing or riskier companies are usually awarded a lower multiple by the market.

Williams Companies currently trades at a PE ratio of 31.5x. For context, this is more than double the Oil and Gas industry average of 13.2x, and well above the average PE ratio of its listed peers, which sits at 14.4x. This difference may seem stark, but it also reflects the company’s positive earnings outlook and financial strength.

To help investors see beyond surface-level comparisons, Simply Wall St calculates a “Fair Ratio”, which incorporates Williams Companies’ unique growth trajectory, profit margins, market cap, and specific risks. This proprietary measure gives an adjusted target PE ratio based on factors that matter for long-term value, rather than simply benchmarking against historical or sector-wide figures.

In Williams Companies’ case, the Fair Ratio is 20.6x. While this is lower than the current PE multiple, the difference suggests the stock may be trading a bit rich. However, the gap is not extreme, indicating the market premium is somewhat justified by the company’s outlook.

Result: OVERVALUEDNYSE:WMB PE Ratio as at Oct 2025

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

Upgrade Your Decision Making: Choose your Williams Companies Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your informed perspective on a company, tying together your expectations for future revenue, profit margins, and fair value to create a story behind the numbers. Narratives make investing more meaningful and accessible by linking Williams Companies’ current strategy, industry trends, and financial outlook into a customized forecast and value estimate, rather than just relying on traditional ratios or analyst targets.

By using Narratives on Simply Wall St’s Community page, trusted by millions of investors, you can easily build and track your own fair value estimates, deciding if Williams Companies is a buy, hold, or sell as new data comes in. When news breaks or earnings are released, your Narrative updates automatically, helping you stay ahead and make timely decisions. For example, while some investors see Williams Companies as poised for robust, long-term growth with a fair value as high as $74 due to its network expansions and LNG momentum, others take a more cautious approach, valuing it closer to $44 because of regulatory and decarbonization risks. Narratives let you compare these viewpoints and form your own evidence-based stance so you’re always investing with conviction.

Do you think there's more to the story for Williams Companies? Create your own Narrative to let the Community know!NYSE:WMB Community Fair Values as at Oct 2025

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.

Companies discussed in this article include WMB.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

View Comments