Goldman Sachs raises ONEOK stock price target to $88 on earnings beat

Goldman Sachs raised ONEOK’s price target to $88 from $85 while keeping a Neutral rating, citing improved estimates after Q1 2026 results and stronger Bakken performance. Management lifted 2026 EBITDA guidance by 2% to $8.0B-$8.5B, and Goldman now forecasts $8.516B versus $8.281B consensus. The article also notes mixed analyst reactions after ONEOK missed Q1 EPS by $0.08 and revenue by $60M, but higher full-year guidance supports a modestly constructive view.

Analysis

The market is rewarding the fact that the quarter reduced execution risk, but the bigger signal is that the estimate reset has likely started to compress the gap between sell-side skepticism and management’s confidence. When guidance moves up despite a headline EPS miss, it usually means the business is shifting from volume discovery to margin extraction, and that is often where midstream names re-rate fastest over a 6-12 month window. The stock being near highs matters less than the direction of revisions: upward estimate drift tends to support multiple expansion even when absolute valuation looks optically full.

The underappreciated second-order effect is that visible growth in a broad-footprint gas transporter can crowd in the rest of the gas complex. If the company truly has behind-the-meter and power-demand optionality, then the market may need to reprice not just pipeline throughput but the implied scarcity value of molecules tied to data center and power-load growth. That is constructive for gas-heavy infrastructure names with contract durability, but it can be negative for names dependent on the old industrial demand narrative, where incremental capital could be diverted toward higher-return power-linked projects.

The key risk is that this becomes a “guidance beat, fundamentals later” story: if the next 1-2 quarters fail to show tangible project disclosure or margin conversion, the stock can stall even with favorable analyst tone. A second risk is that the market may be over-discounting optionality that is still mostly narrative; if management commentary stays vague, the current rerating can fade over 1-3 months. By contrast, if EBITDA keeps tracking near the high end of the updated range, this becomes a persistent estimate-up cycle rather than a one-off.

The contrarian view is that the market may be chasing the wrong part of the story: the real opportunity is not the headline target increase, but the probability that consensus is still too low on multi-year cash flow durability. In that setup, the stock is less a short-term momentum trade and more a slow-burn quality compounder, especially if the power-supply angle proves real and repeatable. The upside is therefore more time-dependent than price-dependent; patience matters more than paying for a clean near-term catalyst.

Key Decisions for Investors

• Stay long OKE on pullbacks over the next 2-6 weeks; risk/reward improves if the market digests the raised guide without a second-quarter catalyst, since downside is likely limited by continued estimate revisions.
• Pair trade: long OKE / short a lower-quality gas infrastructure peer with weaker visible project backlog for 3-6 months; the thesis is that capital will continue migrating to names with clearer power-demand optionality and better EBITDA visibility.
• Buy 3-6 month OKE call spreads rather than stock if entering after the recent run; this expresses upside from another estimate reset while capping premium risk if management fails to convert commentary into disclosed projects.
• Trim or hedge if OKE fails to show follow-through in the next earnings cycle; if guidance stays elevated but no incremental project evidence appears, the rerating case likely pauses.