ONEOK
OKE
$95.43
-0.33%
Oneok, Inc. is a diversified midstream energy company that provides natural gas gathering, processing, storage, and transportation, along with natural gas liquids (NGL) transportation and fractionation, and refined products and crude oil logistics. Operating primarily in the Midcontinent, Permian, and Rocky Mountain regions, it serves as a critical link between energy producers and end-users. As a major player in the midstream sector, Oneok distinguishes itself through its integrated asset network and fee-based business model, which provides stable cash flows. The current investor narrative centers on its robust volume growth, strategic expansion in the Permian Basin (including the Brazos Midland acquisition), and the potential for AI-driven natural gas demand to boost long-term throughput, alongside a high dividend yield that attracts income-focused investors.…
OKE
ONEOK
$95.43
Related headlines
Investment Opinion: Should I buy OKE Today?
Based on the analysis, OKE is rated a Buy. The company's strong revenue growth of 19.6% YoY, expanding margins, and attractive 5.6% dividend yield support a positive outlook. The consensus analyst recommendation is 'Buy' with an average target of $99.95, implying 4.7% upside. Key supporting data includes a trailing PE of 13.5x (below historical average), a PS ratio of 1.38x (below industry average), and robust operating cash flow of $934M. The stock has outperformed the S&P 500 over the past year, gaining 28.3% vs. 18.65%, reflecting strong momentum.
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OKE 12-Month Price Forecast
The AI assessment is bullish with medium confidence. OKE's strong revenue growth and margin expansion indicate solid operational performance, while the high dividend yield provides downside support. The stock's valuation is reasonable relative to its growth, and analyst sentiment is positive. However, the modest upside to targets and high debt levels temper confidence. If OKE can sustain growth and manage debt, the stock is likely to appreciate; otherwise, it may underperform. Key factors to watch include volume growth, margin trends, and debt reduction.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on ONEOK's 12-month outlook, with a consensus price target around $99.94 and implied upside of +4.7% versus the current price.
Average Target
$99.94
0 analysts
Implied Upside
+4.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$89 - $111
Analyst target range
Oneok is covered by 19 analysts, with a consensus recommendation of 'Buy' and a mean rating of 2.24 (where 1 is Strong Buy and 5 is Sell). The average price target is $99.95, implying an upside of 4.7% from the current price of $95.43. The distribution of ratings is not explicitly provided, but the consensus leans bullish, with recent actions from firms like Citigroup (Buy) and Jefferies (Buy) reinforcing this sentiment. The target price range is $89.00 to $111.00, with the high target suggesting that analysts see potential for further upside, possibly driven by the Permian expansion and AI-driven natural gas demand. The low target of $89.00 implies a downside of -6.7%, which could reflect concerns about valuation or commodity price volatility. The spread between the high and low targets is 24.7%, indicating moderate uncertainty. Recent rating actions show a mix of holds and buys, with no major downgrades, suggesting stable sentiment. Overall, the analyst community is optimistic about Oneok's growth prospects, but the modest upside to the average target suggests that much of the good news is already priced in.
Bulls vs Bears: OKE Investment Factors
Oneok presents a compelling bull case with robust revenue growth, expanding margins, and a high dividend yield, supported by strategic Permian expansion and AI-driven demand catalysts. However, bear points highlight high debt, liquidity concerns, and a modest upside to analyst targets, suggesting the stock is fairly valued. Currently, the bull case has stronger evidence due to the company's solid operational performance and growth trajectory, but the key tension lies in whether OKE can sustain its growth and margin expansion to justify its premium valuation. If growth decelerates or debt levels become problematic, the stock could face downside, making the resolution of these factors critical for the investment thesis.
Bullish
- Strong Revenue Growth: Q1 2026 revenue surged 19.6% YoY to $9.618B, with sequential acceleration from $7.887B in Q2 2025. This robust growth is driven by all segments, particularly Refined Products and Crude Oil at $4.716B, indicating strong demand for midstream services.
- Expanding Profitability: Gross margin improved to 26.7% in Q1 2026 from 19.6% in Q2 2025, while operating margin rose to 14.8% from 15.7% a year ago (though slightly down sequentially). Net income grew 21.7% YoY to $774M, with EPS up to $1.23 from $1.04, reflecting operational leverage.
- Attractive Dividend Yield: OKE offers a dividend yield of 5.6%, well above the S&P 500 average, supported by a payout ratio of 76.1%. This provides a solid income cushion and attracts income-focused investors, underpinning the stock's appeal in a low-yield environment.
- Strategic Permian Expansion: The Brazos Midland acquisition strengthens OKE's Permian Basin footprint, a key growth area. This strategic move is expected to boost long-term cash flows and competitive advantage, aligning with the company's growth trajectory and analyst optimism.
Bearish
- High Debt Levels: Debt-to-equity ratio stands at 1.46, which is elevated and typical for midstream but increases financial risk. Interest expense of $439M in Q1 2026 consumes a significant portion of operating income, limiting financial flexibility.
- Liquidity Concerns: Current ratio of 0.71 indicates potential liquidity issues, as current liabilities exceed current assets. This could strain the company's ability to meet short-term obligations without relying on external financing.
- High Dividend Payout Ratio: Payout ratio of 76.1% leaves limited room for dividend growth or reinvestment. If earnings decline, the dividend may be at risk, which could deter income investors and pressure the stock.
- Modest Analyst Upside: Average analyst target of $99.95 implies only 4.7% upside from the current price of $95.43. This suggests that much of the positive news is already priced in, limiting near-term capital appreciation potential.
OKE Technical Analysis
Oneok's stock is in a clear uptrend, with a 1-year price change of +28.3%, significantly outperforming the S&P 500's +18.65% over the same period. The current price of $95.43 sits at 95.6% of its 52-week range (low: $64.02, high: $99.85), indicating the stock is trading near its highs, reflecting strong momentum and investor confidence. This positioning suggests the market is rewarding the company's growth prospects, though it also raises the risk of a short-term pullback given the extended nature of the rally.
Beta
0.72
0.72x market volatility
Max Drawdown
-19.4%
Largest decline past year
52-Week Range
$64-$100
Price range past year
Annual Return
+28.3%
Cumulative gain past year
| Period | OKE Return | S&P 500 |
|---|---|---|
| 1m | +9.4% | -0.4% |
| 3m | +8.1% | +4.5% |
| 6m | +9.8% | +13.9% |
| 1y | +28.3% | +19.0% |
| ytd | +28.4% | +12.9% |
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OKE Fundamental Analysis
Oneok's revenue trajectory is robust, with Q1 2026 revenue of $9.618 billion, up 19.6% year-over-year, and sequential growth from $9.065 billion in Q4 2025. The multi-quarter trend shows accelerating growth, with Q3 2025 revenue at $8.634 billion and Q2 2025 at $7.887 billion, indicating a strong upward trajectory. Revenue segments show Refined Products and Crude Oil as the largest at $4.716 billion, followed by NGL at $3.646 billion, and Natural Gas Gathering and Processing at $1.997 billion, with all segments contributing to the growth. The company's profitability is solid, with Q1 2026 net income of $774 million and a gross margin of 26.7%, which is an improvement from the 19.6% in Q2 2025, indicating expanding margins. Operating margin for Q1 2026 was 14.8%, and net margin was 8.0%, both showing improvement from the prior year's Q1 (operating margin 15.7%, net margin 7.9%). The company is profitable and generating strong earnings, with EPS of $1.23 in Q1 2026, up from $1.04 in Q1 2025. Oneok's balance sheet shows a debt-to-equity ratio of 1.46, which is high but typical for midstream companies, and a current ratio of 0.71, indicating potential liquidity concerns. However, the company generated $934 million in operating cash flow in Q1 2026, and free cash flow was $70 million after capital expenditures of $864 million, which is lower than the $576 million FCF in Q4 2025. The ROE is 15.1%, and ROA is 5.8%, reflecting efficient use of equity and assets. The company's dividend payout ratio is 76.1%, and it has a dividend yield of 5.6%, which is attractive for income investors, but the high payout ratio and debt levels warrant monitoring.
Quarterly Revenue
$9.6B
2026-03
Revenue YoY Growth
+19.6%
YoY Comparison
Gross Margin
26.7%
Latest Quarter
Free Cash Flow
$2.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is OKE Overvalued?
Given Oneok's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 13.5x, while the forward PE is 15.3x, indicating that the market expects earnings to grow, as the forward multiple is higher. This gap suggests that analysts anticipate higher future earnings, which is consistent with the company's growth trajectory. Compared to the industry average PE of 12.5x (based on available data), Oneok trades at a premium of 8%, which is justified by its superior growth and profitability. The company's PS ratio is 1.38x, which is lower than the industry average of 1.5x, suggesting that on a sales basis, the stock is undervalued. Historically, Oneok's PE has ranged from 6.8x to 23.9x over the past few years, with the current 13.5x sitting near the lower end of that range, indicating that the stock is not overvalued relative to its own history. The EV/EBITDA of 10.2x is also reasonable for the midstream sector, and the dividend yield of 5.6% provides additional support for the valuation.
PE
13.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~20x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are notable. Oneok's debt-to-equity ratio of 1.46 is high, and interest expenses of $439M in Q1 2026 represent a significant fixed cost. The current ratio of 0.71 indicates potential liquidity stress, though operating cash flow of $934M provides some cushion. Free cash flow was only $70M in Q1 2026 due to heavy capital expenditures of $864M, which could limit dividend growth or increase borrowing needs. Revenue concentration in the Refined Products and Crude Oil segment (49% of total) exposes the company to commodity price volatility and demand cyclicality, though fee-based contracts mitigate some risk.
FAQ
Key risks include high debt levels (debt-to-equity of 1.46), which could strain finances if interest rates rise. Liquidity risk is present with a current ratio of 0.71. The high dividend payout ratio of 76.1% leaves little room for error. Commodity price volatility can impact volumes and margins, though fee-based contracts mitigate some risk. Regulatory changes in the energy sector could also affect operations. The most severe risk is a prolonged downturn in natural gas prices, which could reduce producer activity and hurt OKE's volumes, potentially leading to a -6.7% decline to the analyst low target of $89.
The 12-month forecast is moderately bullish. The base case, with a 55% probability, sees the stock trading around $99.95 (analyst average target), implying 4.7% upside. The bull case (25% probability) targets $105-$111, driven by strong growth and AI demand. The bear case (20% probability) sees a decline to $85-$89, if growth stalls or debt issues arise. The most likely scenario is the base case, assuming continued revenue growth of 10-15% and stable margins.
OKE is fairly valued relative to its growth and peers. The trailing PE of 13.5x is below its historical average of around 15x, but 8% above the industry average of 12.5x. The PS ratio of 1.38x is below the industry average of 1.5x, suggesting slight undervaluation on sales. The EV/EBITDA of 10.2x is reasonable for midstream. The market is pricing in moderate growth, as indicated by the forward PE of 15.3x, which is higher than trailing. Overall, the stock is not overvalued, but the modest upside to analyst targets suggests limited near-term gains.
OKE is a good buy for investors seeking a high dividend yield and exposure to midstream energy growth. The stock offers a 5.6% yield, supported by a 76.1% payout ratio, and has shown strong revenue growth of 19.6% YoY. Analyst consensus is 'Buy' with an average target of $99.95, implying 4.7% upside. However, the stock is not cheap, trading at a 8% premium to the industry PE, and carries high debt. It is best suited for long-term investors who can tolerate moderate risk and are attracted to the income component.
OKE is better suited for long-term investment due to its stable cash flows, high dividend yield, and growth prospects in the Permian and AI-driven demand. The stock has a beta of 0.72, indicating lower volatility than the market, which appeals to long-term holders. Short-term trading is possible given the stock's momentum, but the modest upside to targets suggests limited near-term gains. A minimum holding period of 3-5 years is recommended to fully benefit from the dividend income and potential capital appreciation from expansion projects.