Step on the Gas: ONE Gas Delivering on Traditional Infrastructure and Large Load Growth; Initiating at Buy with $93 PT

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Step on the Gas: ONE Gas Delivering on Traditional Infrastructure and Large Load Growth; Initiating at Buy with $93 PT

Executive Summary

We initiate coverage of OGS stock with a Buy rating and a $93 price target. We believe the company's consistency over the years

from its traditional gas LDC business paired with greater demand from larger customers position it uniquely compared to peers.UTILITIES OGS's footprint on the map, geographically speaking and on the regulatory front, allow the company to benefit from overall

customer growth in its service territories, to utilize annual mechanisms and constructive legislation, and to continue investing

in its core business. OGS also maintains a strong balance sheet, though the greater than average reliance on CP does open up

some incremental risk given the rate environment. We will also be monitoring the company's progress on locking down largeEQUITY load customers, specifically in Texas, politics, and the large load theme. The company overall has a relatively quiet calendar -

the two main events we will be watching will be the Oklahoma primary elections and the Oklahoma rate case filing next year.

OGS continues to stay active on the affordability front, ensuring rates for customers stay below or in-line with inflation and

implementing tariffs for the larger customers. Overall, we view the OGS story as compelling, as the company is seeing the best of

both worlds in all three states: traditional gas LDC growth and large load optionality; high growth with defensive characteristics.RESEARCH Initiation in a Nutshell

Featured Spotlight - Pg. 8

The Best of Both Worlds. Rooted in traditional gas infrastructure growth, OGS is uniquely positioned to capture large load growth