NEW YORK, July 18, 2026, 11:22 a.m. EDT — Williams Companies (NYSE:WMB) has finalized a $5.34 billion power contract with a consortium led by Blackstone Inc. (NYSE:BX), a move that materially reduces the company's funding risk for its data-center power projects. However, the stock continues to trade at a valuation premium relative to peers, and shares slipped 1.8% on Friday to close at $73.38, contributing to a weekly decline of 2.2%.
The financing agreement involves a consortium that includes Apollo Global Management (NYSE:APO) and KKR & Co. (NYSE:KKR). Under the terms, the consortium will acquire a 49% ownership stake in five behind-the-meter power projects, while Williams retains a 51% stake and operational control. Blackstone Credit & Insurance is expected to contribute 59% of the project capital, with Williams providing the remaining 41%. The total base commitment of $4.4 billion suggests project spending of around $9.0 billion, with an additional $900 million (roughly 10% of the base) allocated for potential expansion.
Capital Structure and Investor Returns
The structure includes a 10-point capital promote favoring Williams. The company estimates the partner's expected return at approximately 6.35%, after which Williams captures any further upside, and retains the right to initiate a buyout after seven years. CEO Chad Zamarin noted that the arrangement “enhances returns on the existing portfolio” and enables the company to redeploy capital toward new projects. While the deal eases near-term funding pressure, it does not eliminate project-return risk, as cost overruns, permitting delays, and customer credit issues could reduce the promote.
Market Reaction and Valuation Context
The market's response reflects a focus on execution and valuation. Williams ended Friday at $73.38, down 1.8%, while the S&P 500 slipped 1.0%. Trading volume reached 8.9 million shares. The stock currently trades at a trailing price-to-earnings multiple of 32.2x, significantly higher than its peers: Kinder Morgan (NYSE:KMI) at 21.7x, ONEOK (NYSE:OKE) at 16.7x, and Targa Resources (NYSE:TRGP) at 28.9x. This premium underscores the importance of timely project completion and secured cash flows to justify the valuation.
Management has maintained its 2026 adjusted EBITDA guidance toward the upper end of the $8.05 billion-to-$8.35 billion range, with growth spending forecast at $7.0 billion to $7.6 billion. The financing move is expected to reduce the company's leverage midpoint to roughly 3.6 times.
Broader Market and Sector Outlook
Natural gas markets offered limited support, with August futures closing Friday at $2.911 per million British thermal units, down 1% for the week. Storage levels stood at 3,024 billion cubic feet, 181 Bcf above the five-year average. The energy sector will see its next key update when Kinder Morgan reports results on July 22, followed by Williams' earnings release after the close on August 3, with a conference call on August 4.
Analysts caution that the stock's elevated multiple leaves it vulnerable to a sharp correction if returns disappoint. The next critical assessment for investors will focus on cash flow generation rather than financing capacity.
