ONEOK (NYSE:OKE) Hits New 52-Week High on Analyst Upgrade

Key Points

• ONEOK shares reached a new 52-week high after JPMorgan raised its price target from $95 to $106, though it maintained a neutral rating. The stock traded as high as $99.85.
• ONEOK agreed to acquire Brazos Midstream’s Midland Basin assets for $4.425 billion, a deal expected to more than double its processing capacity and generate about $80 million in annual synergies.
• Apollo-managed funds will invest $9 billion in nonvoting equity, enabling ONEOK to use roughly $5 billion to reduce debt and target debt-to-EBITDA of approximately 3.25x. Analysts overall rate the stock “Moderate Buy,” with an average price target of $93.50.

ONEOK, Inc. (NYSE:OKE - Get Free Report)'s stock price reached a new 52-week high on Tuesday after JPMorgan Chase & Co. raised their price target on the stock from $95.00 to $106.00. JPMorgan Chase & Co. currently has a neutral rating on the stock. ONEOK traded as high as $99.85 and last traded at $96.17, with a volume of 509031 shares changing hands. The stock had previously closed at $96.01.

Several other equities research analysts have also weighed in on the company. US Capital Advisors lowered ONEOK from a "strong-buy" rating to a "moderate buy" rating in a research report on Thursday, August 20th. Weiss Ratings reissued a "buy (b-)" rating on shares of ONEOK in a research report on Thursday, August 13th. UBS Group restated a "neutral" rating and set a $108.00 target price on shares of ONEOK in a report on Monday. TD Cowen upped their target price on shares of ONEOK from $85.00 to $90.00 and gave the stock a "hold" rating in a research report on Thursday, July 16th. Finally, Morgan Stanley lifted their price target on shares of ONEOK from $103.00 to $105.00 and gave the company an "equal weight" rating in a research report on Tuesday, August 18th. One analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and ten have issued a Hold rating to the company's stock. Based on data from MarketBeat, ONEOK has an average rating of "Moderate Buy" and an average price target of $93.50.

ONEOK News Roundup

Here are the key news stories impacting ONEOK this week:

• Positive Sentiment: Permian acquisition strengthens growth outlook: ONEOK agreed to acquire Brazos Midstream’s Midland Basin natural-gas gathering and processing assets for $4.425 billion in cash. The deal is expected to more than double ONEOK’s Midland Basin processing capacity, add approximately $80 million in annual synergies and be immediately accretive to earnings and free cash flow per share. ONEOK to Acquire Brazos Midstream’s Permian Midland Basin Assets
• Positive Sentiment: Apollo financing supports deleveraging: Apollo-managed funds will make a $9 billion nonvoting minority equity investment. ONEOK plans to use roughly $5 billion to reduce existing debt, targeting debt-to-EBITDA of about 3.25x, while using up to $2 billion for cash tender offers on outstanding notes. Lower leverage could improve financial flexibility for organic investment, dividend increases and share repurchases. ONEOK Announces Cash Tender Offers
• Positive Sentiment: Analyst target increased: JPMorgan raised its price target for ONEOK from $95 to $106 while maintaining a neutral rating, signaling improved valuation potential despite a lack of an outright bullish recommendation.
• Neutral Sentiment: Supportive sector backdrop: Midstream companies have broadly raised full-year guidance after a strong second quarter, and accelerating natural-gas infrastructure demand may provide a favorable operating environment for ONEOK. Midstream Scales Up Natural Gas Infrastructure
• Negative Sentiment: Transaction execution and valuation risks remain: The acquisition and related Apollo financing substantially reshape ONEOK’s capital structure and add integration, governance and transaction-complexity risks. JPMorgan’s neutral rating also suggests the expected benefits may already be reflected in the stock’s valuation.

Institutional Trading of ONEOK

A number of institutional investors and hedge funds have recently modified their holdings of the business. Zions Bancorporation National Association UT increased its holdings in ONEOK by 73.3% in the 4th quarter. Zions Bancorporation National Association UT now owns 338 shares of the utilities provider's stock worth $25,000 after buying an additional 143 shares in the last quarter. Pin Oak Investment Advisors Inc. purchased a new stake in shares of ONEOK during the 2nd quarter valued at about $28,000. Elyxium Wealth LLC purchased a new stake in shares of ONEOK during the 4th quarter valued at about $29,000. Cornerstone Financial Management LLC bought a new stake in shares of ONEOK in the fourth quarter worth approximately $29,000. Finally, Transamerica Financial Advisors LLC raised its holdings in shares of ONEOK by 69.6% during the second quarter. Transamerica Financial Advisors LLC now owns 363 shares of the utilities provider's stock valued at $32,000 after purchasing an additional 149 shares during the last quarter. Institutional investors own 69.13% of the company's stock.

ONEOK Price Performance

The stock has a market capitalization of $60.23 billion, a PE ratio of 16.55, a PEG ratio of 2.64 and a beta of 0.73. The firm's fifty day moving average price is $91.09 and its two-hundred day moving average price is $88.84. The company has a quick ratio of 0.59, a current ratio of 0.74 and a debt-to-equity ratio of 1.34.

ONEOK (NYSE:OKE - Get Free Report) last posted its earnings results on Monday, August 3rd. The utilities provider reported $1.53 EPS for the quarter, topping analysts' consensus estimates of $1.46 by $0.07. ONEOK had a net margin of 9.29% and a return on equity of 16.41%. The business had revenue of $12.05 billion during the quarter, compared to the consensus estimate of $8.95 billion. During the same quarter in the previous year, the firm posted $1.34 EPS. ONEOK has set its FY 2026 guidance at 5.680-5.680 EPS. On average, equities analysts predict that ONEOK, Inc. will post 5.84 earnings per share for the current year.

ONEOK Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, August 14th. Shareholders of record on Monday, August 3rd were given a $1.07 dividend. This represents a $4.28 annualized dividend and a yield of 4.5%. The ex-dividend date of this dividend was Monday, August 3rd. ONEOK's dividend payout ratio (DPR) is presently 73.79%.

About ONEOK

ONEOK, Inc NYSE: OKE is a publicly traded midstream energy company headquartered in Tulsa, Oklahoma. The company owns and operates a portfolio of natural gas and natural gas liquids (NGL) pipelines, processing facilities, fractionators and storage and terminal assets. Its operations are focused on gathering, processing, transporting, fractionating and marketing NGLs and interstate natural gas, providing critical infrastructure that connects hydrocarbon production to refineries, petrochemical plants and other end markets.

ONEOK's asset base includes pipeline systems and processing plants that move and condition natural gas, along with infrastructure for the transportation, storage and fractionation of NGLs such as ethane, propane and butane.

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