ONEOK Inc. "Reiterate Buy, Focus on Key Upcoming Projects & synergy vs...."

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ONEOK Inc. "Reiterate Buy, Focus on Key Upcoming Projects & synergy vs...."

ONEOK Inc. UBS Research

2026 Outlook and Tailwinds

2026 Outlook

With their 4Q25 earnings (released in February), OKE released '26 EBITDA guidance

range of $7.9Bn - $8.3Bn, noting growth in '26 was expected to be offset by a

moderation in producer activity due to the projected commodity environment (OKE's

expectations reflected average WTI crude oil price of ~$55 - $60 per barrel in '26). OKE

also noted expectations of a ~$150MM tailwind from incremental synergies (following

acquisitions of Enlink, Magellan, Medallion, and Easton Energy), including asset

optimization (~$61MM), batching & blending (~$39MM), market share (~$34MMM),

and reduced corporate expenses (~$16MM), with cumulative synergies to reach ~

$625MM by year-end.

However, with their 1Q26 earnings (in April), OKE revised their '26 EBITDA guidance

range to $8.0Bn - $8.5Bn, highlighting strong segment performance and increased

opportunities due to a more constructive market environment. Furthermore, on the

1Q26 call, management clarified Winter Storm Fern was already accounted for in their

guidance, and the EBITDA outperformance was driven by stronger volume expectations

(due to higher commodity prices) and continued expected differential opportunities.

OKE also reiterated that seasonal factors generally lead to higher EBITDA as the year

goes on, with 1Q also expected to be the weakest quarter in '26. In 2025, 4Q25

earnings were ~$370MM higher than 1Q25. For 2026, seasonal factors include

increasing refined product volumes, FERC tariff adjustments in July, peak refined

products blending season starting in mid-September, and contributions from completed

projects - Denver Refined Products Expansion (ISD in Mid-year 2026), and Medford