In a report released yesterday, Jean Ann Salisbury from Bank of America Securities reiterated a Buy rating on Oneok, with a price target of $109.00.
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Jean Ann Salisbury has given her Buy rating due to a combination of factors that highlight Oneok’s strategic positioning and potential for growth. The management’s detailed explanation of the synergy potential from recent deals, estimated between $600 million to $1.15 billion, demonstrates a focus on cost reduction and high-return projects. These synergies include significant insurance savings and infrastructure connections that are expected to lower costs and enhance operational efficiency.
Additionally, concerns about market share in the Bakken region appear to be mitigated by the limited impact of competing pipelines, suggesting that Oneok’s position is not immediately threatened. The company’s strategic projects, such as the LPG export terminal and Eiger Express, align with a potential shift towards reducing growth capital expenditure and increasing stock buybacks post-2026. This strategic shift, coupled with the company’s operating leverage, suggests substantial upside potential and a favorable re-rating of the stock, despite near-term macroeconomic challenges.
In another report released on August 26, Morgan Stanley also maintained a Buy rating on the stock with a $110.00 price target.