Nearly 60% of the analysts surveyed by Reuters rated ONEOK (OKE) as a “hold,” 33% rated it as a “buy,” and the remaining 7% rated it as a “sell.” For the next year, the median target price for the stock is $58. Currently, the stock is trading at $56.73, which implies just 2% upside from its current levels in the next year.
As the above graph shows, the “buy” recommendations for ONEOK have been increasing since May 2017. The high percentage of “hold” recommendations for ONEOK might indicate that the company’s growth potential and positives are already priced-in.
As for ONEOK’s peers, nearly 64% of the analysts rated Kinder Morgan (KMI) as a “buy.” Nearly 97% of the analysts rated Enterprise Products Partners (EPD) as a “buy,” while 86% of the analysts rated Energy Transfer Partners (ETP) as a “buy.”
Improved drilling activity in ONEOK’s areas of operations, higher fee-based earnings in its Natural Gas Gathering and Processing segment, and ONEOK’s presence in high-growth areas including the STACK and SCOOP play position it for future growth.
ONEOK’s simplified structure after ONEOK Partners’ acquisition also benefits the company. ONEOK offers attractive expected dividend growth.
“Producer activity remains strong in the STACK and SCOOP and in the core areas of the Permian and Williston basins,” said Terry K. Spencer, ONEOK’s president and CEO. The company also expects to benefit from increased ethane recovery in 2H17 and 2018.
Enterprise Products Partners will report its 2Q17 earnings on August 3. To learn more, read Enterprise Products Is Expected to Report Higher 2Q17 Earnings.
For a pre-earnings analysis of Energy Transfer Partners and Energy Transfer Equity (ETE), read What to Expect for ETP and ETE’s Earnings in 2Q17.