ONEOK, Inc. (OKE), with a market cap of $50.4 billion, operates in the energy sector, specializing in natural gas and natural gas liquids. The Tulsa, Oklahoma-based company provides a range of services, including gathering, processing, storage, and transportation across its diverse business segments.
Shares of this pipeline operator have outperformed the broader market over the past 52 weeks. OKE has gained 29.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 21.7%. In 2024, ONEOK's stock rose 22.1%, compared to SPX’s 13.9% rise on a YTD basis.
Zooming in further, ONEOK's stock has also outpaced the Nasdaq Oil & Gas ETF’s (FTXN) marginal gain over the past 52 weeks and a 5.9% return on a YTD basis.
ONEOK has outperformed over the past year due to its strategic expansion projects, such as the acquisition of Magellan and the Elk Creek pipeline expansion, which have bolstered its capacity and operational efficiency. Additionally, its fee-based revenue model has provided stable cash flow and protected against commodity price volatility, enhancing overall financial resilience. Moreover, the stock surged 4.7% following its Q2 earnings report due to a significant increase in natural gas and NGL volumes from the Rocky Mountain region, which boosted profits despite lower commodity prices.
However, for the current fiscal year, ending in December, analysts expect OKE's EPS to decline 8.9% year over year to $4.99. The company's earnings surprise history is mixed. It beat the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy.” That is based on nine “Strong Buy” ratings, one “Moderate Buy,” and eight “Holds.”
The configuration has remained steady over the past months.
On Aug. 9, Jeremy Tonet from J.P. Morgan reiterated a “Buy” rating on ONEOK, setting a price target of $93 – the street-high price target. This implies a potential upside of 8.5% from the current price levels.
As of writing, OKE is trading marginally below the mean price target of $86.29.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
