Morgan Stanley Lowers Oneok Price Target to $110, Maintains Overweight Rating

Morgan Stanley has lowered its price target on Oneok (OKE) to $110 from $122 and maintains an Overweight rating. The firm is updating its price targets for North American Midstream & Renewable Energy Infrastructure stocks and expects a potential September Fed rate cut to be a short-term catalyst for midstream stocks.

Morgan Stanley has lowered its price target for ONEOK, Inc. (NYSE:OKE) to $110 from $122, maintaining an Overweight rating. The adjustment is part of a broader reassessment of North American midstream and renewable energy infrastructure stocks. The firm expects a potential interest rate cut by the Federal Reserve in September to serve as a short-term catalyst for midstream stocks [1].

ONEOK, a leading player in the energy sector, is primarily focused on gathering, processing, storage, and transportation of natural gas. The company is known for its extensive pipeline network and strategic partnerships. ONEOK's current stock price stands at $73.49, with a market capitalization of approximately $46.28 billion. The Eiger Express Pipeline, a joint venture including ONEOK, is expected to significantly enhance the company's operational capabilities and market reach [1].

The Eiger Express Pipeline, a 450-mile natural gas pipeline, will transport up to 2.5 billion cubic feet per day from the Permian Basin in West Texas to the Katy area near Houston. This project, which is expected to be completed by mid-2028, will support the increasing demand from gas-fired power plants and liquefied natural gas facilities along the Gulf Coast. The pipeline is part of the existing Matterhorn joint venture, which aims to transport the increasing natural gas production from the Permian Basin to the Gulf Coast region [1].

Morgan Stanley's updated price target reflects the company's optimism regarding ONEOK's involvement in the Eiger Express Pipeline project. The firm believes that the pipeline will enhance ONEOK's operational capabilities and market reach, positioning the company for potential growth. Despite the recent stock price decrease, ONEOK's strategic initiatives and market presence position it for potential long-term growth.

Investors should consider the potential impact of an interest rate cut on midstream stocks, as well as ONEOK's strategic pipeline projects and financial health metrics. The recent adjustment in the price target by Morgan Stanley suggests a positive outlook for ONEOK, but investors should also be aware of the risks associated with commodity market volatility and regulatory changes.

References:
[1] https://site.financialmodelingprep.com/market-news/oneok-inc-eiger-express-pipeline-project-growth