Goldman Sachs resumes ONEOK stock coverage with Neutral rating

Investing.com - Goldman Sachs has resumed coverage of ONEOK Inc (NYSE:OKE) with a Neutral rating and a $75.00 price target, implying a 7% total return. Currently trading at $73.1 with a market capitalization of $46 billion, InvestingPro analysis suggests ONEOK is undervalued, with the stock trading at an attractive P/E ratio of 14.2x.

The firm notes that ONEOK has expanded significantly through acquisitions, adding Permian oil exposure and refined product pipelines to its existing operations in Bakken G&P, Mid-Con G&P, and Gulf Coast NGLs through deals with Magellan, EnLink, and Medallion.

Goldman Sachs points out that while these acquisitions have added scale, earnings stability, and growth potential, they coincided with ONEOK’s valuation multiple declining from a premium to a modest discount compared to peers, currently trading at approximately 9x next twelve months EBITDA. The company maintains an attractive dividend yield of 5.64%, supported by stable cash flows.

The firm identifies several near-term challenges for ONEOK, including oil prices, limited spread opportunities, Bakken volumes, and NGL competition, placing its estimates modestly below consensus while still projecting a 5% EBITDA compound annual growth rate from 2025-2028.

Goldman Sachs suggests ONEOK’s recent stock underperformance (-27% year-to-date versus AMNA +5%) may be nearing its end, but notes that significant upside would likely require either a better oil outlook or clarity on the company directing its growing free cash flow toward higher shareholder returns.

In other recent news, ONEOK Inc. reported robust financial results for the second quarter of 2025, highlighting a significant increase in net income and strategic acquisitions that enhanced its earnings. The company has also announced plans for the Eiger Express Pipeline, a new 450-mile natural gas pipeline in collaboration with WhiteWater, MPLX LP, and Enbridge Inc., which will transport up to 2.5 billion cubic feet per day of natural gas from West Texas to the Gulf Coast. Additionally, ONEOK completed a $3 billion notes offering to refinance debt, which includes various senior notes due between 2032 and 2055.

Analyst firms have recently adjusted their price targets for ONEOK, with RBC Capital lowering its target to $88, citing potential commodity price headwinds in 2026. Similarly, TD Cowen reduced its price target to $87, pointing to concerns about the company’s 2026 EBITDA projections. These developments come after ONEOK’s recent earnings report, which indicated downside risks to future growth. Despite these adjustments, ONEOK continues to focus on strategic expansions, including investments in the Delaware Basin.

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