DCF Studio

    WMB · NYQ · Energy

    The Williams Companies, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 38.55

    Market price

    USD 71.19

    Implied upside

    -45.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 27.9% of revenue against depreciation of 19.5%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 38.55-45.8%
    Exit multiple
    USD 95.56+34.2%
    Market price
    USD 71.19

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn5bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 12.3bnUSD 14.1bnUSD 16.0bnUSD 17.8bnUSD 19.6bnUSD 21.3bnUSD 22.8bnUSD 24.1bnUSD 25.0bnUSD 25.7bn+8.5%
    EBITUSD 4.1bnUSD 4.7bnUSD 5.4bnUSD 6.0bnUSD 6.6bnUSD 7.2bnUSD 7.7bnUSD 8.1bnUSD 8.4bnUSD 8.6bn+8.5%
    NOPATUSD 3.3bnUSD 3.8bnUSD 4.2bnUSD 4.7bnUSD 5.2bnUSD 5.7bnUSD 6.1bnUSD 6.4bnUSD 6.7bnUSD 6.8bn+8.5%
    Add depreciation & amortisationUSD 2.4bnUSD 2.8bnUSD 3.1bnUSD 3.5bnUSD 3.8bnUSD 4.2bnUSD 4.5bnUSD 4.7bnUSD 4.9bnUSD 5.0bn+8.5%
    Less capital expenditureUSD -3.4bnUSD -3.9bnUSD -4.5bnUSD -5.0bnUSD -5.5bnUSD -6.0bnUSD -6.4bnUSD -6.8bnUSD -7.1bnUSD -7.3bn+8.7%
    Capex, % of revenue27.9%28.0%28.0%28.0%28.1%28.1%28.1%28.2%28.2%28.3%-
    Less increase in working capitalUSD 1.1mUSD 5.7mUSD 5.8mUSD 5.8mUSD 5.7mUSD 5.3mUSD 4.7mUSD 4.0mUSD 3.0mUSD 2.0m-6.5%
    Free cashflow to firmUSD 2.2bnUSD 2.6bnUSD 2.9bnUSD 3.2bnUSD 3.5bnUSD 3.8bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.6bn+8.3%
    Discount factor0.96590.90120.84080.78440.73180.68280.63700.59430.55450.5173-
    Present valueUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.6bnUSD 2.5bnUSD 2.4bn-
    Present Value Of The ForecastUSD 24.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.750Reported 0.627, pulled toward 1.0 (Blume)
    Cost of equity8.07%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 3.1x interest cover. Book interest / average debt was lower, at 5.1%.
    Market capitalisationUSD 87.1bn74.8% of capital
    Total debtUSD 29.4bn25.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.18%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 38.55

    68% of EV

    Forecast FCFF, final year
    USD 4.6bn
    Capex at depreciation, working capital in reinvestment
    USD 6.8bn
    Less reinvestment at g/ROIC (32.9% of NOPAT)
    USD -2.2bn
    Capitalised
    USD 4.6bn
    ROIC (reported)
    7.6%
    Terminal value, undiscounted
    USD 100.2bn
    Terminal value, discounted
    USD 51.9bn
    Enterprise value
    USD 76.6bn
    Less net debt
    USD 29.3bn
    Equity value
    USD 47.2bn

    Exit at 17.2x EBITDA

    Value per shareUSD 95.56

    83% of EV

    Terminal value, undiscounted
    USD 235.2bn
    Terminal value, discounted
    USD 121.7bn
    Enterprise value
    USD 146.4bn
    Less net debt
    USD 29.3bn
    Equity value
    USD 117.1bn

    Spread between methods: 85%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.18%76.7880.7986.6395.55110.32
    6.18%54.1454.8856.0557.8560.64
    7.18%39.5339.0138.5538.1837.92
    8.18%30.1029.3928.6827.9727.26
    9.18%23.3822.7822.1821.5820.99

    Outlined: this model. Green text: above today's price of 71.19. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.9%7.9%13.0%
    EBIT margin38.4%33.7%50.0%
    Discount rate-7.2%5.6%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.