Today, 3:22 PM
- MLP sentiment is deteriorating, driven most recently by the unexpected and unexplained departure of Energy Transfer Equity's (ETE -39.1%) CFO, and the situation will remain bearish for the group until crude oil and high yield bottom, says Baird analyst Ethan Bellamy.
- In addition to ETE and Energy Transfer Partners (ETP -22.3%), Baird downgrades EnLink Midstream (ENLC -21.9%), ONEOK Partners (OKS -6%), Plains All American (PAA -11%) and Plains GP Holdings (PAGP -14%) to Underperform, and cuts Antero Midstream (AM +1.3%), ONEOK (OKE -9.4%) and Tallgrass Energy GP (TEGP -13.1%) to Neutral from Outperform.
- ETFs: AMLP, AMJ, KYN, MLPL, YMLP, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, FEI, JMF, MLPN, SRF, CBA, MLPG, MLPX, GMZ, EMO, MLPS, MLPY, TTP, CTR, AMZA, GER, ZMLP, CEN, YMLI, AMU, MLPJ, SMM, MIE, DSE, FPL, ENFR, ATMP, JMLP, MLPC, MLPW
Mon, Jan. 25, 12:21 PM
- ONEOK Partners (OKS -0.9%) is downgraded to Neutral from Outperform with a $25 price target, cut from $40, at Baird; the firm also lower its price target on ONEOK Inc. (OKE -3.3%) to $28 after incorporating a lower commodity outlook and the reduced 2016 capex budget announced last month.
- Baird says OKS should benefit from fundamental tailwinds such as increased flared gas capture in 2016, but the firm models conservatively given the ugly tape; with the still-deteriorating oilfield outlook, the firm sees units as efficiently priced but maintains a preference for OKE.
Mon, Jan. 11, 11:27 AM
- ONEOK (OKE -1.5%) is lower despite receiving an upgrade to Buy from Hold with a $27 price target at Argus, which says the company is benefiting from positive volume and contract trends.
- Argus says it had been concerned about debt levels and capital spending at ONEOK Partners (OKS -2%), which accounts for 100% of OKE's cash flow, but management allayed some of its concerns about potentially dilutive equity issuance at OKS after announcing that new stock would not be issued until late 2017.
- OKE also has been restructuring its contracts from percent of proceeds to fee-based, which makes it less sensitive to fluctuating volumes and energy prices -an advantage in an already volatile 2016.
Dec. 31, 2015, 9:57 AM
- A week after Oppenheimer upgraded ONEOK (OKS +1.6%, OKE +1.2%) in response to its 2016 outlook (included plans to maintain ONEOK's current distribution), Credit Suisse's John Edwards has upgraded to Outperform, while hiking his targets for OKS and OKE by $4 apiece, to $38 and $40.
- Edwards has upped his 2016 estimates by 2% - he now respectively expects 2016 EBITDA and discounted cash flow of $1.81B and $1.34B. "We have revised estimates on the NatGas G&P segment higher offset by a lowered NGL segment ... We assume margins for fractionation to run ~$0.05/gal blended and about $0.055/gal blended for transportation. For 2016, OKS said it expects 800-870Mbbl/d of gathering volumes and 540-590MBbl/d of fractionation volumes,"
- He's also now assigning the natural gas firm a lower discount rate to reflect the G&P contract restructuring, lower sensitivity to commodity prices, and zero equity needs until mid-2017. "With these changes our valuation for OKS/OKE moves up by $4 each."
- ONEOK is up moderately in spite of a 0.6% S&P drop. It joined many other energy names in selling off on Monday and Wednesday.
Dec. 23, 2015, 12:27 PM
- ONEOK (OKE +6.6%) is upgraded to Outperform from Perform with a $27 price target at Oppenheimer, which says management impressed investors with its solid 2016 outlook expecting growth in EBITDA and distributable cash flow despite the weak energy environment.
- Oppenheimer believes OKE’s distribution appears sustainable in 2016, citing distribution coverage of more than 1x and a manageable Q4 2016 debt/EBITDA ratio of 4.2x.
- The firm says it now prefers OKE to ONEOK Partners (OKS +3.9%) despite both being rated Outperform, and notes that OKE's current yield is now in parity with OKS, a discrepancy that is not likely to persist.
Dec. 22, 2015, 1:30 PM
- Energy sector MLPs are rallying, likely reacting to positive guidance given yesterday by Oneok (OKE +6.2%; OKS +9.7%).
- Baird analysts say ONEOK’s “robust” guidance slightly exceeded their expectations for “healthy coverage” on next year's payouts.
- Tudor Pickering says ONEOK's dividend outlook may have positive implications for Enable Midstream Partners (ENBL +26.6%), as investors have been skeptical that the MLP will be able to hold its distribution in 2016.
- Meanwhile, Morgan Stanley says it is still too early to buy the MLPs amid concerns about bankruptcies coming in the energy sector, noting that many yield-seeking investors are very overweight the group, which could mean substantial selling may await.
- So far today: KMI +2.9%, EPD +2.3%, WMB +2.8%, ETP +7.7%, ETE +4.4%, MMP +2.5%, SEP +1.1%, PAA +5.8%.
- ETFs: AMLP, AMJ, KYN, MLPL, YMLP, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, MLPN, SRF, FEI, JMF, CBA, MLPG, MLPX, GMZ, EMO, MLPS, MLPY, TTP, CTR, YMLI, AMU, CEN, ZMLP, GER, AMZA, SMM, MIE, DSE, ENFR, FPL, ATMP, JMLP, MLPC, MLPW, IMLP
Dec. 21, 2015, 8:55 AM
- ONEOK (OKE, OKS) +2.2% premarket after saying it expects to sustain its current distribution and achieve distribution coverage of 1x or better in 2016, and remains committed to maintaining its investment-grade credit ratings.
- OKE also says it does not expect to access public equity markets in 2016 and well into 2017.
- OKE foresees $675M in cash available for dividends at 1.3x coverage ratio, as well as FY 2016 adjusted EBITDA of $$1.88Bn, distributable cash flow of $1.39B, growth capex of $460M, and maintenance capex of $140M.
- "Our commodity price outlook remains cautious for 2016. However, we expect the partnership's 2016 earnings to increase compared with 2015 guidance, primarily from volume and fee-based margin increases, resulting in increased distributable cash flow," OKE says.
Sep. 14, 2015, 2:56 PM
- ONEOK (OKE -2.2%) is initiated with a Neutral rating at Credit Suisse, but 24/7's Jon Ogg thinks the call seems almost like a Buy rating in that the $41 price target implies a nearly 20% upside from today's price, plus a ~7% dividend yield.
- The firm says OKE's prospects are improving sequentially, with a modest but improving distribution coverage ratio, and contract renegotiations could provide an added boost by year-end; another positive is a $4B-$5B capex backlog, on top of the $3B-$4B in execution.
- OKE is the pure-play general partner of ONEOK Partners (OKS -2.1%), which Credit Suisse rates at Outperform with a $40 price target.
Aug. 12, 2015, 5:59 PM
- ONEOK Partners (NYSE:OKS) agrees to sell ~21.5M common units representing limited partner interests at a price of $30.17/unit in a private placement to parent company ONEOK (NYSE:OKE).
- OKS also will sell ~3.3M common units at the same price to funds managed by Kayne Anderson.
- To pay for its purchase, OKE plans to sell $500M of senior notes.
- OKS -3.1%, OKE -1.9% AH.
Jun. 22, 2015, 3:30 PM
- Williams Cos. (WMB +23.8%) must either show its ability to stand on its own merit or accept a better takeout offer, analysts say after the company rejected a $48B buyout bid from Energy Transfer Equity (ETE -3.8%).
- Analysts suggest that given the limited number of potential buyers, ETE stands a good chance of eventual success, perhaps after raising its offer; Raymond James analyst Darren Horowitz, for one, expects a higher offer to come in, since pipelines remain a coveted, high-value infrastructure that is attractive to own even though oil and gas prices have plunged.
- Jefferies' Christopher Sighinolfi says disclosing the bid was a "defensive move" by WMB, and says he is waiting to learn of WMB's timetable for completing its strategic review.
- Argus says WMB management has demonstrated its ability to create shareholder value through both acquisitions and divestitures; the firm believes that the rejection of ETE's all-stock offer is prudent, and that ETE will need to raise its offer if it wishes to pursue the deal (Briefing.com).
- While WMB surges, Williams Partners (WPZ -6.9%) is sharply lower, since ETE's offer was contingent on the termination of WMB's pending absorption of WPZ.
- Analysts say other companies that run big pipelines may be merger candidates, including Oneok (OKE, OKS) and regional specialists such as Targa Resources (TRGP, NGLS).
May 6, 2015, 5:40 PM
Dec. 10, 2014, 12:58 PM
- Energy stocks are slammed across the board as oil prices take another nosedive (I, II), with the losses heaviest on shares of small, U.S.-based oil and gas producers.
- “Financial leverage is being thrown out the window, and everything else is being purged as well,” says Simmons analyst Bill Herbert, who adds that cuts to production budgets in the coming year likely will mean more pain for oil service companies.
- Among the hardest-hit shares: TPLM -15.2%, CRK -12.4%, GDP -11.9%, NOG -9.5%, AREX -8.6%.
- Investors have been less quick to dump shares of integrated oil companies, but today they have been smacked too: XOM -2.8%, CVX -2.9%, COP -2.3%, BP -2%, RDS.A -2.2%, TOT -2.3%.
- Today's worst performers on the S&P 500 include OKE -8.2%, DNR -7.4%, NE -5.6%.
- Service companies also are down: SLB -2.6%, HAL -2.7%, WFT -6.6%, BHI -2%.
- ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, XES, IEZ, PXI, FENY, PXJ, RYE, FXN, DDG
Jun. 16, 2014, 8:58 AM
- Williams Cos. (WMB) +12.3% premarket after agreeing to buy Access Midstream Partners (ACMP) for $6B and is upgraded to Buy from Neutral at Jefferies with a $65 price target.
- Jefferies notes WMB's yield/dividend growth is now consistent with pure-play general partner peers; says Plains GP (PAGP), Targa Resources (TRGP) and ONEOK (OKE) trade with an average ~3.5% dividend yield, which would equate to a $71 price for WMB.
- Credit Suisse raises its WMB target price to $65 from $50, and believes a significant re-rating should ensue.
Feb. 3, 2014, 2:18 PM
- ONEOK (OKE -2.8%) completes the spinoff of its natural gas distribution business into a separate, publicly traded company to begin trading on the NYSE with the symbol OGS.
- The new company, One Gas, includes Kansas Gas Service, Oklahoma Natural Gas and Texas Gas Service.
- Current OKE shareholders will receive one share of the new company for every four shares of OKE they possess.
Feb. 3, 2014, 12:51 PM
Jul. 25, 2013, 2:58 PM
ONEOK (OKE +22.4%) is soaring in reaction to plans to spin off its natural gas distribution business into a stand-alone publicly traded company. Morgan Stanley sees still more upside ahead, upgrading shares to Overweight with a $64 price target; it believes OKE will pay a materially higher dividend with growth potential of 20% through 2015.| Jul. 25, 2013, 2:58 PM