Analyst Note| Stephen Ellis |
Oneok's fourth-quarter results were good, as it benefited from new projects in service, while its 2021 guidance was slightly above our expectations. We expect to increase our $41 fair value estimate a few dollars and will maintain our narrow moat rating. 2020 EBITDA was $2.7 billion (a 6% increase year over year) and 2021 guidance at the midpoint is $3.05 billion, which puts Oneok as one of the strongest U.S. midstream growth stories this year. 2020 results largely benefited from an increase in natural gas liquids volumes in the Rockies and the Permian basins. Higher natural gas liquids volumes will drive 2021 results, along with ongoing ethane recovery volumes, and a full year of contributions from projects completed in 2020.