ONEOK (OKE): Valuing the Stock After Eiger Express Pipeline Commitment Expands Energy Infrastructure Reach

ONEOK (OKE) just made a move that could catch the attention of anyone following energy infrastructure. Along with its joint venture partners, ONEOK has committed to building the Eiger Express Pipeline, a project set to move significant volumes of natural gas from the Permian Basin across Texas. This was not an impulsive decision. It comes after securing long-term transportation agreements, suggesting real demand and momentum behind the expansion. For investors, it is exactly the sort of concrete project that can shift expectations around both growth and stability. Stepping back, this announcement arrives during a stretch where ONEOK's stock performance has lagged, with shares down over the past year. While the last three years saw steady returns, recent months indicate fading momentum despite annual gains in revenue and net income. The company’s role in large, long-duration assets like the new pipeline could reshape its growth story, especially as energy exports become an even bigger theme across the industry. So, with a major project now moving forward but shares reflecting recent underperformance, is the market undervaluing ONEOK’s longer-term potential, or is future growth already factored into the current price?

Most Popular Narrative: 24.4% Undervalued

According to the most followed narrative, ONEOK is notably undervalued based on future cash flows and projected financial growth. The current price sits well below consensus estimates of intrinsic worth, suggesting opportunity for re-rating as forward targets come into focus.

“Persistent growth in global demand for U.S. natural gas and NGLs, driven by increasing international energy needs and continued coal-to-gas switching, supports long-term volume throughput and higher utilization rates across ONEOK's midstream and export infrastructure. This directly underpins future revenue and EBITDA growth.”

Want to know just how bold the narrative is about ONEOK's upside? This story leans on aggressive top-line expansion, next-level margins, and a profit multiple that rivals industry leaders. Curious about the projections fueling such a steep discount to fair value? Get ready for forecasts that might surprise even optimistic investors.

Result: Fair Value of $96.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, even this optimistic outlook could falter if commodity price volatility persists or if integration challenges from recent acquisitions erode expected synergies.

Find out about the key risks to this ONEOK narrative.

Another View: Industry Comparison Tells a Different Story

Looking at ONEOK from an industry perspective shows that its current valuation is actually a bit higher than the average for similar companies in oil and gas. Can this premium be justified by its growth pipeline, or has optimism gone too far?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding ONEOK to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own ONEOK Narrative

If these perspectives do not quite fit your outlook or you prefer taking a hands-on approach, you can craft your own narrative analysis in just minutes. Do it your way

A great starting point for your ONEOK research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Take charge and give your portfolio an edge by checking out stocks with untapped potential, strong payouts, and innovative tech you might be overlooking. Smart investors act now rather than waiting for opportunities to pass by.

• Capture the upside of undervalued companies before the crowd catches on by using our undervalued stocks based on cash flows.
• Unlock growth with promising tech firms driving the new era of artificial intelligence in healthcare through our healthcare AI stocks.
• Maximize income and stability by targeting businesses offering yields above 3% with our handy dividend stocks with yields > 3%.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com