Last Update 02 Feb 26

Fair value Decreased 1.28%

OKE: Dividend Increase And Execution Risks Will Shape Future Earnings Confidence

Analysts have nudged their blended fair value estimate for ONEOK lower from US$88.63 to about US$87.50. This reflects a mix of recent target cuts and a few upward revisions as firms reassess discount rates, revenue growth assumptions, profit margin expectations and future P/E levels.

Analyst Commentary

Recent Street research on ONEOK has been active, with several firms adjusting their targets and views in quick succession. Together, these moves point to a more balanced, wait and see stance around valuation, execution and growth rather than a one sided call.

Bullish Takeaways

Bullish analysts raising targets highlight room for upside in the current valuation if management continues to execute against existing plans and capital projects as expected.
The neutral initiation suggests some analysts see the current share price as roughly aligned with fundamentals. This can support the blended fair value estimate even as other targets are trimmed.
Supportive views often look to steady cash flow characteristics as a base for ONEOK’s earnings profile. This can help underpin valuation assumptions around P/E and future cash returns to shareholders.
Target increases signal that some on the Street are willing to ascribe a higher multiple to ONEOK’s earnings, provided the company hits its operating and financial objectives.

Bearish Takeaways

Several recent price target cuts, including from larger houses such as JPMorgan, show that a group of bearish analysts see less room for multiple expansion at the current share price.
Bearish analysts appear cautious on the assumptions baked into prior models, including discount rates, long term revenue growth and margin profiles. This feeds through into lower fair value estimates.
The cluster of downward target revisions suggests greater focus on execution risks, such as the ability to deliver planned projects on budget and maintain profitability in line with prior expectations.
With multiple cuts arriving close together, some on the Street seem more comfortable applying a tighter P/E and more conservative valuation framework until there is clearer evidence on earnings quality and growth durability.

What's in the News

Board of directors approved a quarterly dividend of $1.07 per share, which the company describes as a 4% increase, resulting in an annualized dividend of $4.28 per share (Key Developments).
The dividend is scheduled to be paid on Feb. 13, 2026, to shareholders of record as of the close of business on Feb. 2, 2026 (Key Developments).
The updated dividend level may influence how income focused investors think about ONEOK’s total return profile and payout sustainability over time (Key Developments).

Valuation Changes

The blended fair value estimate has edged lower from US$88.63 to about US$87.50 per share.
The discount rate used in valuation models has moved slightly lower from 7.38% to about 7.36%.
The revenue growth assumption in the models has been set modestly higher from about 2.87% to roughly 3.21%.
The net profit margin forecast has been trimmed from about 12.63% to roughly 12.25%.
The future P/E assumption is slightly higher, shifting from about 18.56x to roughly 18.69x earnings.

Expanding infrastructure, strategic acquisitions, and growing export capabilities position ONEOK for stable revenue, enhanced margins, and increased market share in a robust energy market.
Improved free cash flow and reduced leverage strengthen capital allocation, supporting higher shareholder returns and reinvestment aligned with global energy demand trends.
Earnings growth is constrained by commodity volatility, high debt from acquisitions, shifting energy demand, and mounting regulatory and ESG challenges for new infrastructure projects.

Catalysts

About ONEOK

Operates as a midstream service provider of gathering, processing, fractionation, transportation, storage, and marine export services in the United States.What are the underlying business or industry changes driving this perspective?

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, directly underpinning future revenue and EBITDA growth.
Ongoing expansions and capital investments in key areas like the Permian and Delaware Basins (e.g., new processing plants, pipeline connections) position ONEOK to capture incremental fee-based volumes and benefit from robust U.S. shale production, leading to higher top-line growth and enhanced earnings stability.
Strong integration and synergy capture following recent acquisitions (e.g., EnLink, Magellan, Medallion) are driving operating leverage and margin expansion, with further cross-asset optimization and record blending volumes anticipated to increase net margins and support double-digit EBITDA growth in the near to medium term.
Enhanced exposure to export markets through strategic assets such as the Texas City LPG export terminal and NGL connections to the Gulf Coast, combined with ongoing customer interest, increases potential global market share and pricing power, positively impacting revenue and earnings as export demand grows.
Recent tax legislation changes lowering projected cash taxes until 2028, combined with growing free cash flow and reduced leverage, improve ONEOK's capacity for disciplined capital allocation, accelerating shareholder returns and enabling reinvestment to capitalize on global energy trends-supporting long-term net income and cash flow growth.

ONEOK Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming ONEOK's revenue will grow by 6.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 11.1% today to 12.3% in 3 years time.
Analysts expect earnings to reach $4.2 billion (and earnings per share of $6.9) by about September 2028, up from $3.1 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $3.5 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.3x on those 2028 earnings, up from 14.6x today. This future PE is greater than the current PE for the US Oil and Gas industry at 12.6x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.01%, as per the Simply Wall St company report.

ONEOK Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Management lowered its 2026 adjusted EBITDA outlook by approximately 2% due to tighter commodity price spreads and market volatility, signaling continued earnings sensitivity to commodity cycles and muted growth expectations if current conditions persist, which could constrain EBITDA and net income growth.
The company's blending and butane marketing synergies, a notable driver of recent earnings, are becoming increasingly volume-driven as commodity spreads narrow compared to prior years, creating potential headwinds for net margins and resulting in more volatile and less predictable revenue if spreads remain compressed.
Despite progress on debt reduction, recent major acquisitions (Magellan, EnLink, and Medallion) add financial leverage and integration risk; should macroeconomic or commodity conditions deteriorate, interest expenses and debt servicing could pressure net margins and impair capital allocation flexibility.
The company's growth is heavily tied to U.S. NGL and natural gas processing and gathering, including significant new investments in key basins like the Permian and Delaware; long-term shifts to electrification, decarbonization policy, or breakthrough alternative fuels could erode domestic demand and pipeline utilization rates, impacting revenue and asset returns.
Increasing scrutiny on new fossil fuel infrastructure due to regulatory and ESG-related permitting hurdles could slow or cap the build-out of new projects central to ONEOK's growth strategy, raising compliance and construction costs and risking delays in cash flow realization for future projects.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $96.111 for ONEOK based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $126.0, and the most bearish reporting a price target of just $82.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $34.0 billion, earnings will come to $4.2 billion, and it would be trading on a PE ratio of 22.3x, assuming you use a discount rate of 8.0%.
Given the current share price of $71.84, the analyst price target of $96.11 is 25.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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