OKE — ONEOK, Inc.

As of 2026-08-27, sentiment is bullish: Q2 2026 net income grew 13% YoY to $967M, adjusted EBITDA rose ~7% to $2.12B, management raised 2026 net income/EBITDA guidance, and volumes hit records in the Permian/Gulf Coast. The new AI data-center gas supply agreement adds a secular growth angle, and the stock's 30%+ YTD rally plus a ~4.8% dividend yield have attracted buyers.

The 3-year trend is an upward inflection, but the revenue numbers overstate underlying operating momentum. Quarterly revenue stepped from ~$4-5B in 2023/early 2024 to $12.05B in Q2 2026, driven by acquisitions (Magellan, EnLink), record NGL volumes, and higher pass-through commodity/product prices. Earnings tell a steadier story: diluted EPS went from ~$1.0-1.2 in 2023 to $1.53 in Q2 2026, with Q2 2026 operating income up ~10% YoY and operating cash flow up ~35% YoY. Reported margins look erratic — gross margin was only 14.2% in Q2 2026 versus 19.5% a year earlier — because low-margin product flows are inflating revenue. Q4 2025's ~30% operating margin appears to be a one-off gain, not a sustainable run-rate.

As of 2026-08-27, at $94.72, OKE trades at 16.3x TTM EPS versus its 5-year average of 16.0x, and roughly 16.4x the 2026E EPS of $5.77. It is also 1.52x sales versus a 5-year average of 1.77x. That is a fair, not cheap, valuation: in line with its own history, supported by a 4.8% dividend yield, but with no margin of safety. The 1.25 PEG relies on a double-digit forward growth projection; on 2026E EPS growth of only ~6%, the multiple is not demanding but offers limited upside from valuation re-rating.

As of 2026-08-27, price has largely caught up with estimates. The 2026 guidance raise is now public, and the stock at ~16x forward EPS is paying for the company to simply execute on that guidance. Wall Street's average target of ~$93 sits just below the market price, confirming the recovery is mostly priced in. To get to the low/mid-$100s, OKE needs quarterly beats, continued Permian/Gulf volume records, and tangible revenue/FCF from AI data-center gas deals. If those fall short or commodity volumes soften, the post-rally price has more downside room than it did before the surge.

As of 2026-08-27, RSI is 57.12 — positive momentum, not overbought. Price is 2.9% above the 20-day SMA, 4.5% above the 50-day SMA, and 12.6% above the 200-day SMA. The trend is up, with resistance at the 52-week high near $97.90 and support around the 20-day (~$92) and 50-day (~$90.60) moving averages. Chasing at $95 is less attractive than buying a pullback toward that support zone.

• Record Permian Basin and Gulf Coast oil/gas production drives utilization across ONEOK's NGL, refined products, and gas pipelines.
• AI data-center power demand is boosting the buildout of natural-gas-fired generation and creating new midstream supply contracts.
• Interest-rate and cost-of-capital environment: with $30.8B long-term debt and 1.44 D/E, OKE is sensitive to whether the Fed can ease; higher-for-longer caps leverage flexibility.
• NGL/commodity price spreads and basis differentials directly impact revenue and margins, especially in the marketing/processing segments.
• Midstream consolidation and post-acquisition integration (Magellan, EnLink) continue to shape the asset base and synergy runway.

• Q3 2026 earnings in early November: evidence that Permian volume records and the raised $8.2-8.5B adjusted EBITDA guidance are tracking.
• Commercialization of AI data-center gas supply agreements and additional power-generation midstream contracts.
• In-service of expansion projects like Greater Denver and Gulf Coast/Permian NGL capacity, plus further debt reduction or rating upgrades.
• Rate cuts or a continued strong NGL/refined product volume tape that pushes EBITDA above the guidance midpoint.

• High leverage: debt-to-equity of 1.44, $30.8B long-term debt, and only $161M cash; a prolonged downturn or capex overrun could stress the rating.
• Thin liquidity: current ratio of 0.737 and negative working-capital position require steady access to credit/operating cash flow.
• The 4.8% dividend is not as defensive as peers with unbroken payout records; ONEOK has cut its dividend in prior commodity downturns.
• Acquisition integration/execution risk: much of the recent growth came from Magellan/EnLink, and failure to hit synergy targets would hurt returns.
• Commodity and volume sensitivity: lower oil/gas production or narrower NGL/refined-product spreads would reduce utilization and cash flow.

OKE is a good midstream business with real momentum — record volumes, raised guidance, a new AI-power growth angle, and a 4.8% yield — but it is fairly priced after a 30% run. The fundamental direction is positive enough for a constructive lean, though the leverage and thin current ratio argue for adding on pullbacks rather than chasing $95.

I applied 11.0x to 2026E adjusted EBITDA of $8.35B (guidance midpoint), getting ~$91.9B EV; subtracting ~$30.6B net debt and dividing by ~631M shares gives ~$97.0. The 11.0x multiple is a modest premium to the current ~10.8x, justified by record volumes, AI-data-center gas optionality, and negative accruals, but constrained by leverage and thin liquidity.