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ONEOK (OKE) Stock Looks Undervalued On Its Brazos Midstream Deal

Simply Wall St · 1d ago

ONEOK stock has delivered strong multi year returns, yet the latest valuation checks point to a more mixed picture rather than a clear bargain or clear overpricing. After a 5 year run that has rewarded long term holders, the stock now invites a closer look at how those gains line up with current pricing.

  • Over 5 years, ONEOK has returned 136.6%, which puts extra focus on whether the current share price already reflects much of the good news.
  • The planned acquisition of Brazos Midstream's Permian Midland Basin assets and the linked debt reduction plan can support cash flow durability, although the added integration and balance sheet execution risk may affect how investors price the stock.
  • ONEOK's valuation checks give a score of 4 out of 6, which points to a mixed picture rather than a clear bargain or clear overvaluation on the broad metrics.

The issue now is whether ONEOK's recent gains and corporate moves leave enough upside in the current valuation to appeal to new investors.

Compare ONEOK's run and balance sheet moves with other income focused infrastructure plays by scanning 12 dividend fortresses that have been filtered for yield and resilience.

Is ONEOK a Bargain on Earnings?

The P/E multiple fits ONEOK well because earnings are a key focus for income oriented investors watching payout capacity and balance sheet repair. ONEOK currently trades on a P/E of 16.6x, which is below the Oil and Gas industry average of 12.8x but also below the peer group average of 19.0x. That positions the stock somewhere between a low bar industry screen and a richer group of closer peers.

The Fair Ratio model points to a P/E of 22.2x for ONEOK based on its profile. That is higher than both today’s 16.6x and the peer average, which indicates that the current market price does not fully reflect what this framework would imply. Despite the planned Brazos Midstream acquisition and linked debt reduction plan attracting attention, the P/E still sits at a discount to this tailored fair multiple.

On this earnings multiple check, ONEOK stock appears undervalued compared with the Fair Ratio benchmark.

NYSE:OKE P/E Ratio as at Sep 2026
NYSE:OKE P/E Ratio as at Sep 2026

See what the numbers say about this price — find out in our valuation breakdown.

The ONEOK Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for ONEOK pick up where this valuation puzzle leaves off. They explain which potential paths for ONEOK's growth, margins and earnings would need to occur for the stock to be worth meaningfully more or less than today’s price. These Narratives are available on Simply Wall St's Community page. Where a single ratio or model offers one outcome, Narratives unpack the future that outcome depends on so you can watch how it unfolds over time.

On Simply Wall St's community page, bullish and bearish ONEOK narratives sit far apart. This gives you two very different roadmaps for what happens next.

Bull case: 11% undervalued

"The build-out of large-scale, integrated midstream infrastructure in cost-advantaged U.S. shale basins, alongside dedicated acreage and increased control over Delaware Basin operations, gives ONEOK a structural cost and market access advantage that should meaningfully increase fee-based revenues, protect margins, and accelerate free cash flow growth…"

Read the full Bull Case to see why ONEOK could be undervalued

Bear case: 9% overvalued

"Shifting regulations and accelerated renewable adoption threaten long-term demand and asset value, raising risks of revenue stagnation and lower market valuations…"

Read the full Bear Case to see why ONEOK could be overvalued

Do you think there's more to the story for ONEOK? Head over to our Community to see what others are saying!

The Bottom Line

ONEOK looks modestly undervalued on the tailored P/E work, although the broader valuation checks are more mixed. That puts the focus on whether earnings and cash generation stay resilient enough for the market to narrow that gap. The key question is whether the Brazos Midstream acquisition and the debt reduction plan strengthen the business without introducing execution or balance sheet setbacks that justify the current discount. That tension between potential upside and integration risk is what now splits the bull and bear views on ONEOK.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.