Global Energy Demand Will Empower US Midstream Expansion

ONEOK's analyst price target has been lowered by approximately $1.63 to $93.32. Analysts cite recent sector-wide price target revisions, along with a focus on synergy execution, multiple stabilization, and commodity market headwinds as key factors behind the update.

Analyst Commentary

Analysts have recently updated their outlook on ONEOK, reflecting both optimism and caution as the company navigates sector headwinds, ongoing integrations, and evolving market conditions.

• Bullish analysts point to ONEOK's growing scale and improved earnings stability, achieved through recent acquisitions and integrations. This is seen as strengthening its long-term outlook.
• There is notable confidence in the company’s ability to deliver on synergy targets, which could act as a catalyst for future earnings growth and operational efficiency.
• Some analysts highlight the potential for return-focused capital allocation strategies, such as buybacks or dividend increases. These are viewed as attractive drivers of shareholder value, especially as the broader midstream sector shifts focus from pure growth to capital returns.
• ONEOK’s more integrated asset base across hydrocarbons positions the company to benefit from diversified revenue streams and increased operational flexibility.

• Bearish analysts note that recent sector volatility and commodity headwinds, particularly with respect to pricing, may impact growth projections and present ongoing challenges through 2026.
• Company valuation has come under pressure, with ONEOK’s trading multiple moving from a premium to a modest discount versus peers. This raises questions about the timeline for any potential re-rating.
• Some expect it could take time for the company’s valuation to stabilize and for investors to regain confidence, especially given limited further scope for multiple compression.
• Questions remain regarding the long-term trajectory of refined products and macroeconomic uncertainty, which could temper the upside from integration and synergy execution.

What's in the News

• On October 6, 2025, a fire occurred in the heating system of ONEOK's MB-4 fractionator at the Mont Belvieu, Texas, complex. The fire was quickly extinguished, no injuries were reported, and most operations will resume after safety reviews. The company does not expect a material financial impact from the incident (Key Developments).
• ONEOK, along with WhiteWater, MPLX LP, and Enbridge Inc., reached a final investment decision to construct the Eiger Express Pipeline through their Matterhorn joint venture. The pipeline will transport up to 2.5 billion cubic feet per day of natural gas from the Permian Basin to the Katy area in Texas. It is expected to be in service by mid-2028, pending regulatory approvals (Key Developments).
• Wells Fargo Securities, CIBC World Markets, SMBC Nikko Securities America, RBC Capital Markets, Scotia Capital, and MUFG Securities Americas have all been added as Co-Lead Underwriters for ONEOK's $747.7 million fixed-income offering (Key Developments).
• ONEOK completed the repurchase of 1,865,000 shares, representing 0.32% of outstanding shares, for a total of $189.16 million as part of its ongoing buyback program announced in January 2024. No shares were repurchased between April 1, 2025, and June 30, 2025 (Key Developments).

Valuation Changes

• Fair Value Estimate has decreased slightly, moving from $94.94 to $93.32 per share.
• Discount Rate has fallen modestly from 8.02 percent to 7.82 percent. This reflects adjustments to risk assumptions.
• Revenue Growth Assumption has been revised downward to 6.55 percent from the previous 6.74 percent.
• Net Profit Margin has risen marginally to 12.39 percent from 12.31 percent, indicating improved profitability expectations.
• Future P/E Ratio forecast is lower, changing from 22.05x to 21.52x. This suggests slightly tempered valuation multiples.