Valued at $52.1 billion by market cap, Tulsa, Oklahoma-based ONEOK, Inc. (OKE) operates as a leading midstream energy company focused on processing, transportation, and storage of crude, natural gas, and natural gas liquids. The company plays a crucial role in connecting oil & gas producers with end markets across North America.
The midstream giant is set to release its first-quarter results after the markets close on Tuesday, Apr. 29. Ahead of the event, analysts expect OKE to report an adjusted EPS of $1.28, marking an impressive 17.4% increase from $1.09 reported in the year-ago quarter. While the company has surpassed Street’s bottom-line estimates twice over the past four quarters, it has missed the projections on two other occasions.
For the full fiscal 2025, OKE is expected to deliver an adjusted EPS of $5.40, up 4.5% from $5.17 reported in fiscal 2024. In fiscal 2026, its earnings are expected to surge further by 18% year-over-year to $6.37 per share.
OKE stock has gained 8.1% over the past 52 weeks, notably outpacing the Energy Select Sector SPDR Fund’s (XLE) 17% decline and the S&P 500 Index’s ($SPX) 6.6% returns during the same time frame.
Despite delivering better-than-expected financials, ONEOK’s stock prices dipped 2.4% in the trading session after the release of its Q4 results on Feb. 25. Driven by increased volumes and acquisitions, the company’s overall topline increased 33.7% year-over-year to $7 billion, which surpassed the Street’s expectations by 6.8%. Meanwhile, its net income to shareholders surged 34.2% year-over-year to $923 million, and its EPS of $1.57 surpassed the consensus estimates by 8.3%.
However, due to its aggressive acquisitions, the company’s long-term debt has increased 46.4% year-over-year to more than $31 billion as of Dec. 31, 2024. Moreover, its CFO to adjusted EBITDA ratio for fiscal 2024 dropped significantly from 84.3% in fiscal 2023 to 72.1%, which raised concerns about the company’s ability to convert earnings into cash and unsettled investor confidence.
The consensus view on OKE is cautiously optimistic, with a “Moderate Buy” rating overall. Of the 17 analysts covering the stock, opinions include 11 “Strong Buy,” one “Moderate Buy,” and five “Hold.” Its mean price target of $111.70 represents a 32.7% premium to current price levels.
