OKE
ONEOK, Inc.
$89.46
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 24.6% below fair value
You pay
$89.46
Bear
$94.96
Fair
$118.71
Bull
$142.45
Bear
$94.96
+6.2%
$5.78 × 18x P/E
Fair
$118.71
+32.7%
$5.78 × 22x P/E
Bull
$142.45
+59.2%
$5.78 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
15.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $92.50 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $118.71 per share.
Warnings
Dividend-based valuation: $79.65 (below our primary estimate by 39%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $92.50 (from 39 analysts). Our estimate is 40% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples