Key Takeaways:
- Board And Governance Update: ONEOK stock reflects governance strengthening after adding 2 independent directors with energy finance experience, supporting oversight during elevated capital deployment.
- Dividend Growth Signal: ONEOK stock represents income stability following a 4% dividend increase to $4 annually, reinforcing cash flow confidence.
- Price Projection: Based on 18% revenue growth, 18% operating margins, and a 13x exit multiple, ONEOK stock could reach $105 by 2027.
- Upside And Returns: That target implies 34% total upside from the current $79 price, translating into roughly 16% annualized returns.
ONEOK (OKE) is a US midstream infrastructure company providing natural gas, NGL, and refined product services across major basins, supporting fee-based cash flows at scale.
Last week in January, ONEOK added 2 independent directors and raised its quarterly dividend to $1, signaling governance focus and capital return discipline.
ONEOK made about $32 billion in trailing revenue which highlights asset utilization across gathering, processing, and pipeline systems tied to US energy production.
The company produced roughly $6 billion in operating profit with 19% margins, showing cost control and pricing discipline across regulated and contracted assets.
With a $45 billion market value and a 13x earnings multiple, execution strength contrasts cautious pricing, setting up a valuation tension worth examining further.
What the Model Says for OKE Stock
We modeled ONEOK stock using operating scale, rising dividends, and stable midstream positioning supporting predictable cash flows and disciplined capital returns.
Based on 18.2% revenue growth, 18.1% operating margins, and a normalized 13.1x exit multiple, the model projects steady valuation expansion.
That framework implies a $105.05 target price, representing 33.7% total upside and a 16.3% annualized return over 1.9 years.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for OKE stock:
1. Revenue Growth: 18.2%
ONEOK has delivered strong expansion, with one year revenue growth above 20%, supported by acquisitions, higher volumes, and fee-based midstream exposure.
In addition, Integration across NGL and pipeline assets supports double-digit growth as contracted volumes increase.
Growth risks include commodity-linked activity swings and producer capital discipline, but long-term contracts and basin diversification limit downside variability.
Revenue growth of 18.2% reflects added assets, easing toward steady midstream demand levels.
2. Operating Margins: 18.1%
ONEOK historically produced operating margins near 19%, reflecting scale efficiencies, regulated pipeline earnings, and fee-based contracts across its midstream network.
Margins compressed from recent peaks as integration costs and higher operating expenses followed acquisitions, temporarily weighing on reported profitability.
Margin stability relies on throughput recovery, cost control, and better use of existing assets.
Operating margins near 18.1% reflect normalized integration and steady midstream economics.
3. Exit P/E Multiple: 13.1x
ONEOK has traded between 13x and 18x earnings during periods of stable volumes and predictable cash flows.
Current valuation reflects investor caution around leverage, interest rates, and acquisition execution despite improving earnings visibility and dividend growth.
Dividend growth, balance sheet discipline, and contract renewals support sentiment without needing valuation expansion.
A 13.1x exit multiple reflects steady cash flows, moderate growth, and about 16% annual returns.
What Happens If Things Go Better or Worse?
ONEOK’s results depend on basin production, contract volumes, and cost control, creating different outcomes through 2029.
- Low Case: If volumes soften and execution slows, revenue grows around 10.5% with margins near 10.3% → 5.4% annualized return.
- Mid Case: With core assets performing steadily, revenue growth near 11.6% and margins around 10.8% hold → 11.2% annualized return.
- High Case: If export demand and utilization exceed expectations, revenue reaches about 12.6% and margins approach 11.0% → 16.2% annualized return.
The $119 mid-case target is achievable through steady volumes and cost control, without multiple expansion or speculative assumptions.
How Much Upside Does It Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
