Williams Companies (WMB) is back in focus after recent updates on its push to expand natural gas infrastructure for power hungry data centers and potential acquisitions tied to large scale computing demand.

Recent attention on data center demand comes as Williams Companies trades at US$73.52, with a 30 day share price return of 6.8% and a 90 day gain of 23.1%. Its 1 year total shareholder return of 36.4% and very large 5 year total shareholder return suggest momentum has been strong over both shorter and longer horizons.

If this gas infrastructure story has your attention, it could be worth broadening your search to our screener of 35 AI infrastructure stocks, where data center and AI power themes also show up in other businesses.

With Williams Companies trading at US$73.52, sitting roughly 5% below one analyst price target and screening as materially below one intrinsic value estimate, you have to ask: is there still genuine upside here, or is the market already baking in the data center growth story?

Most Popular Narrative: 4.2% Undervalued

With Williams Companies at $73.52 and the most followed narrative pointing to a fair value of $76.75, the story leans toward modest undervaluation driven by long term gas infrastructure themes.

The analyst fair value estimate for Williams Companies has been raised from $68.22 to $76.75, reflecting higher Street price targets in the $71 to $90 range as analysts incorporate updated models, growth capex plans and expectations for continued EBITDA strength.

Street research on Williams Companies has clustered around higher price targets and generally constructive views, with most of the recent updates tied to refreshed models, growth capex plans and EBITDA expectations through and beyond 2030.

Want to see what is sitting behind that higher fair value? The key narrative leans on multi year revenue expansion, higher margins and a richer earnings multiple than the sector usually commands.

Result: Fair Value of $76.75 (UNDERVALUED)

However, you still need to weigh risks such as permitting setbacks in tougher jurisdictions and the chance that long life gas assets face stranded asset or decarbonization pressure.

Another View: Multiples Point To A Full Price

While the narrative fair value suggests modest upside, the current P/E of 34.3x stands well above the fair ratio of 26.8x, the US Oil and Gas industry at 15.4x, and peers at 16.4x. That kind of premium can compress quickly if expectations cool, so it is important to consider how comfortable you are paying this valuation for the company’s story.

Next Steps

Does this mixed picture of optimism and concern match how you see Williams Companies today, or does it feel stretched? Take a moment to review the full balance of risks and rewards in our 3 key rewards and 3 important warning signs.

Ready to hunt for your next idea?

If this story has sharpened your thinking, do not stop with one company. The Screener can help you quickly zero in on focused, data rich ideas.

• Target resilient cash generators with 47 high quality undervalued stocks. This combines quality fundamentals with prices that may not fully reflect them.
• Prioritise stability by checking out 68 resilient stocks with low risk scores, which highlights companies with more measured risk profiles.
• Spot early stage opportunities using our 32 elite penny stocks with strong financials to see which smaller names pass key financial filters.

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.