WMB
The Williams Companies, Inc.
$72.67
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 114.2% above fair value
You pay
$72.67
Bear
$27.14
Fair
$33.92
Bull
$40.70
Bear
$27.14
-62.7%
$2.14 × 13x P/E
Fair
$33.92
-53.3%
$2.14 × 16x P/E
Bull
$40.70
-44.0%
$2.14 × 19x P/E
Adjust Assumptions
15.9x
2.14$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
34.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (34 analysts)
$87.27
Divergence from AlphaVal
61%
Summary
Applying a 16x P/E to adjusted EPS of $2.14, the base-case value is $33.92 per share. DDM cross-check: $57.71.
Warnings
The company pays out 97% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $57.71 (above our primary estimate by 70%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $87.27 (from 34 analysts). Our estimate is 61% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples