Wells Fargo Upgrades ONEOK Inc (OKE) to Outperform; Visible Growth, Favorable Fundamentals, Attractive Valuation

Wells Fargo upgraded ONEOK Inc (NYSE: OKE) from Market Perform to Outperform with a price target range of $78-$83.00.

Wells analyst says, "We are upgrading OKE due to the following reasons: (1) visible and robust dividend growth – we forecast OKE could increase its dividend by 15% annually over the next three years with upside tied to a potential rebound in crude oil / NGL prices, (2) favorable NGL market tailwinds – OKE is well positioned to indirectly benefit from an expected acceleration of NGL-related investments over the next several years at ONEOK Partners (NYSE: OKS), and (3) valuation – OKE is down 9.8% quarter-to-date versus flat performance for the S&P 500 Utilities Index and now trades at an $11/share discount to our sum-of-the-parts valuation. For 2012, OKE expects to pay a dividend of $2.48 per share (i.e. $0.04/share semi-annual increases; 14.8% year/year growth), which is in-line with our previous estimate."

For more ratings news on ONEOK Inc click here and for the rating history of ONEOK Inc click here.

Shares of ONEOK Inc closed at $66.76 yesterday.

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