ONEOK: Cramer's 'Buy' Call vs. The 2025 Reality

The immediate event is a classic market catalyst: Jim Cramer's bullish "buy" call, delivered live on "Mad Money" earlier this week. His endorsement, given during the lightning round, was a direct response to a caller's question. Cramer stated, "ONEOK is a buy right here," and added, "I think this is a great opportunity." This is the bullish signal.

Yet it arrives against a stark, bearish reality. The stock is not just weak; it is deeply depressed. Over the past year, ONEOK shares have fallen 28.9%. They now trade near their 52-week low of $64.02, with the current price hovering around $72.50. This isn't a minor dip. It's the worst performance in the entire energy sector for 2025, where the stock is down 26.8% for the year. Cramer himself labeled it the "caboose of the sector," down 27% in 2025.

The thesis here is clear. Cramer's call highlights a potential mispricing-a sharp disconnect between the stock's depressed price and his assessment of its value. The catalyst is his public endorsement, which could spark a short-term relief rally. But the deep decline suggests underlying issues that the call does not address. The stock's fall from its 52-week high of $111.02 reflects more than just market noise; it points to fundamental pressures that have overwhelmed the company's operational strengths.

The Mechanics: Acquisitions, Debt, and the 2025 Downturn

The stock's collapse is a direct result of a high-stakes growth strategy that strained the balance sheet. ONEOK's aggressive expansion, particularly in the final quarter of 2024, was a major catalyst for the sell-off. The company completed a major acquisition of EnLink Midstream in January 2025, following a spree that included buying Medallion Midstream for $2.6 billion and the remaining stake in EnLink for $4.3 billion in an all-stock deal. This spree came on the heels of ONEOK's mega-acquisition of Magellan Midstream for $18.8 billion in late 2023.

The mechanics are clear. These multibillion-dollar deals added significant scale but also massive debt and integration costs. The result was a sharp increase in leverage. ONEOK's long-term debt ballooned from $12.7 billion as of June 30, 2023, to $32 billion as of September 30, 2025. This debt-backed growth made investors jittery, and the stock felt the pressure throughout 2025.

Yet here's the tension. Despite the stock's freefall, the company's core business is performing. Nearly 90% of ONEOK's earnings are fee-based and growing. For the nine months ending September 2025, net income surged 14% to $2.4 billion. The market is punishing the stock for future financial risk-debt levels and integration costs-while largely ignoring the current cash flow strength. This disconnect is the heart of the mispricing Cramer is calling. The acquisitions are the cost of growth, but they are not yet the cost of failure. The question is whether the market will eventually see the cash flow that is being generated to service that debt.

Valuation and the Path to 2026

The numbers tell a story of deep value and a clear, near-term test. ONEOK trades at a P/E of 13.41, a discount to the broader market. More importantly, analysts expect earnings to grow 17.4% next year, from $5.07 to $5.95 per share. This combination-low multiple, high growth-creates a classic value setup. The stock also offers a dividend yield of 5.5%, providing substantial income while investors wait for the price to catch up.

The immediate catalyst is the next earnings report, expected on February 23, 2026. This will be the first major look at the company's financials since the end of the turbulent 2025 acquisition phase. The market will scrutinize whether the promised cost synergies are materializing and if cash flow is strong enough to start tackling the balance sheet.

The key 2026 catalyst, however, is debt reduction. The company's long-term debt has ballooned to $32 billion, a direct result of its aggressive growth strategy. The path forward hinges on ONEOK's ability to demonstrate that operational integration is delivering the projected $500 million in cost synergies from Magellan alone and that declining capital expenditures will free up significant cash. This cash is needed to pay down debt, which is the primary overhang on the stock.

The bottom line is that the valuation is compelling, but it is a bet on execution. The 5.5% yield and 17% earnings growth forecast are attractive, but they are forward-looking. The February report will be the first concrete test of whether the company can translate its fee-based cash flow strength into tangible debt paydown. If it can, the stock's depressed price may be a temporary mispricing. If integration and cash flow fall short, the bearish thesis could reassert itself.