OKE

Analysis of ONEOK, Inc. (OKE)

Technical Analysis OKE shows signs of a steady, albeit cautious, recovery. While it has posted modest gains recently and exhibits lower volatility than the market (beta <1.0), it remains well below its yearly high, indicating room for upward potential. The sizable drawdown over the past year highlights that the stock is still rebounding, presenting an opportunity for investors seeking stable momentum without excessive risk.

Fundamentals OKE demonstrates solid operational health with consistent revenue growth and stable profitability margins. Its moderate leverage and adequate interest coverage reflect manageable debt levels, though a current ratio below 1.0 signals some near-term liquidity concerns. Operational efficiency is reasonable, supported by effective working capital management, but lower asset turnover suggests potential for improvement in capital utilization.

Valuation Valuation presents a mixed picture: earnings-based metrics like PE and PEG ratios indicate fair pricing aligned with growth expectations, while balance sheet multiples such as PB and EV/EBITDA appear elevated. Without industry benchmarks, it’s challenging to gauge relative valuation, but the stock does not seem excessively priced on an earnings basis.

Risk Assessment OKE carries moderate market risk, with beta below 1.0 and no significant short interest, reducing near-term downside pressure. However, the substantial maximum drawdown underscores vulnerability to volatility, and sector-specific risks—like commodity price swings and regulatory shifts—remain key considerations for energy-focused investors.

Investment Recommendation OKE represents a reasonable opportunity for income-focused investors seeking exposure to the midstream energy sector. Its stable fundamentals, fair earnings-based valuation, and ongoing recovery trajectory support a bullish outlook, though investors should be mindful of commodity cycle risks and liquidity constraints. For those with a medium- to long-term horizon, OKE offers a balanced mix of growth potential and defensive characteristics.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the analysis provided, here is a 12-month outlook for ONEOK, Inc. (OKE):

Catalysts: The primary positive catalysts are OKE's stable operational performance, solid revenue growth, and ongoing recovery from its previous drawdowns. As a midstream energy company with assets critical to natural gas and NGL transportation, steady demand for its fee-based services provides a predictable cash flow stream.

Risks: Key risks include potential liquidity concerns signaled by a current ratio below 1.0, exposing the company to short-term financing challenges. The stock remains sensitive to broader energy sector volatility, particularly commodity price swings and regulatory changes impacting pipeline operations.

Outlook: Given its below-market volatility and fair valuation on an earnings basis, OKE is positioned for moderate, stable growth. In the absence of an analyst target, a reasonable 12-month price range could be $80-$85, representing approximately 8-15% upside from the current price, contingent on stable energy infrastructure demand and no major sector disruptions.

Wall Street Consensus

Most Wall Street analysts are optimistic about OKE's 12-month outlook, with consensus target around $75.85, indicating expected upside potential.

Overall, OKE has investment potential but also faces challenges. Here are key factors to weigh before investing.

OKE has demonstrated modest recent gains while remaining substantially below its yearly peak, reflecting cautious recovery from previous significant declines.

The stock has posted modest positive returns over both one and three months, slightly outperforming the broader market during the latter period, suggesting stable but not aggressive short-term momentum. Its beta below 1.0 indicates slightly lower volatility than the market, which aligns with its measured recovery.

Currently trading near $74, OKE sits approximately 15% above its 52-week low but remains about 33% below its yearly high, indicating it is far from overbought territory. The substantial maximum drawdown over the past year underscores that the stock is still in a recovery phase from previous lows.

Revenue & Profitability OKE demonstrated solid revenue growth, increasing from $7.9 billion in Q2 to $8.6 billion in Q3 2025. The company maintained stable profitability with a net profit margin of 10.9% in Q3, showing slight improvement from 10.7% in the prior quarter. Operating income margin remained healthy at 18.0%, indicating consistent operational performance.

Financial Health The company maintains moderate leverage with a debt-to-equity ratio of 1.53 and total debt-to-capitalization of 60.4%. Interest coverage of 3.46 appears adequate, though the current ratio below 1.0 suggests some near-term liquidity constraints. Operating cash flow coverage ratios appear reasonable, supporting ongoing operations.

Operational Efficiency OKE shows moderate operational efficiency with an ROE of 4.3% and asset turnover of 0.13. The positive cash conversion cycle of 5.0 days indicates effective working capital management. However, relatively low fixed asset turnover suggests potential underutilization of long-term assets.

Based on the provided metrics, OKE appears to be fairly valued based on earnings, with a TTM PE of 14.1 and a forward PE of 12.2 suggesting stable or slightly growing earnings expectations. The PEG ratio near 1.0 indicates the stock's price is reasonably aligned with its projected earnings growth rate. However, the elevated PB ratio of 2.08 and particularly the high EV/EBITDA of 37.9 suggest the market is valuing the company's assets and cash flow generation at a significant premium, which may point to a richer valuation on these bases.

A direct peer comparison is not possible as industry average data is unavailable. Therefore, the valuation assessment relies solely on the company's absolute metrics, which present a mixed picture. The income statement multiples (PE, PEG) suggest reasonable valuation, while the balance sheet and cash flow multiples (PB, EV/EBITDA) indicate a potentially more expensive stance, highlighting the importance of context that industry benchmarks would provide.

Of course. Here is a risk analysis for OKE based on the provided metrics.

OKE's primary risk, volatility, is moderate relative to the broader market, as indicated by its Beta of 0.92. This suggests the stock's price movements are generally slightly less volatile than the market average. However, the significant 1-year maximum drawdown of -41.46% reveals that the stock is still susceptible to substantial price declines during market downturns or company-specific challenges, representing a key risk for investors with a shorter time horizon.

Regarding other risks, the absence of notable short interest is a positive signal, implying that professional investors do not have a strong, concentrated belief that the stock's price will fall significantly. This lack of bearish sentiment reduces the risk of a short squeeze. However, investors should remain aware of risks inherent to OKE's business model, such as exposure to commodity price cycles (particularly natural gas and NGLs) and regulatory changes affecting energy infrastructure, which are not directly captured by these market metrics.