On Thursday, Williams Companies (NYSE:WMB) stock received an upgrade from Argus, moving from a Hold to a Buy rating with a price target set at $47.00. The upgrade comes after Williams reported an adjusted net income from continuing operations of $719 million, or $0.59 per diluted share, for the first quarter of 2024. This marks an increase from $684 million, or $0.56 per share, compared to the same period last year.
The improved performance is attributed to higher earnings in the Transmission & Gulf of Mexico division. This boost was a result of recent expansion projects, acquisitions, and stronger storage fees. Additionally, the West division, which focuses on upstream operations, also saw benefits from improved commodity margins.
Williams Companies has reaffirmed its full-year guidance. For 2024, the company expects an adjusted EBITDA between $6.8 billion and $7.1 billion. Capital expenditures, which include maintenance and growth investments, are projected to be between $2.55 billion and $3.05 billion. The forecast for the previous year was $2.711 billion.
In light of the first-quarter results, which surpassed estimates by $0.10 per share, Argus has raised its 2024 earnings per share (EPS) estimate for Williams Companies to $1.96, up from the previous estimate of $1.86. The current consensus for the 2024 EPS stands at $1.83 per share.
InvestingPro Insights
Following the recent upgrade by Argus, Williams Companies (NYSE:WMB) has demonstrated a robust financial performance. InvestingPro Tips highlight that Williams has a history of consistent dividend growth, raising its dividend for 6 consecutive years and maintaining dividend payments for 51 consecutive years. This consistency is a strong signal for income-focused investors. Additionally, the company is trading at a premium with a high P/E ratio relative to near-term earnings growth, suggesting that investors may be expecting higher earnings in the future.
From the perspective of market valuation, InvestingPro Data shows Williams Companies with a market capitalization of $50.96 billion and a P/E ratio of 17.69 as of the last twelve months as of Q1 2024. The company's revenue for the same period stood at $10.16 billion, though it experienced a decline of 9.39% in revenue growth. Despite this, the company's gross profit margin remains high at 60.7%, indicating efficient operations and strong pricing power.
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