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?
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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.
However, even this optimistic outlook could falter if commodity price volatility persists or if integration challenges from recent acquisitions erode expected synergies.
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?
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
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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.
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Kshitija (or Keisha) Bhandaru is an Equity Analyst at Simply Wall St and has over 6 years of experience in the finance industry and describes herself as a lifelong learner driven by her intellectual curiosity. She previously worked with Market Realist for 5 years as an Equity Analyst.
Operates as a midstream service provider of gathering, processing, fractionation, transportation, storage, and marine export services in the United States.
