ONEOK, Inc. (OKE Quick QuoteOKE - Free Report) emphasized stronger Permian Basin activity, expanding infrastructure capacity and improved financial flexibility during its third-quarter 2026 earnings call. Management raised full-year guidance for the third time this year, supported by higher volumes, commercial optimization and contributions from recently acquired assets.

The discussion centered on growth opportunities heading into 2027, particularly the Brazos Midstream acquisition, new processing capacity and natural gas demand. Executives also addressed capital spending, leverage targets and commodity-related uncertainties.

OKE Raises 2026 Outlook on Stronger Operations

ONEOK increased its 2026 adjusted EBITDA guidance to $8.5-$8.6 billion, with a midpoint of $8.55 billion. CFO Walter Hulse said the midpoint increased $200 million from the previous outlook, including $100 million attributable to stronger underlying business performance.

The updated guidance incorporates approximately $75 million from the Brazos acquisition, partly offset by transaction costs. Hulse emphasized that management had maintained conservative assumptions amid geopolitical volatility.

During the third quarter, ONEOK reported earnings of $2.13 per share against the Zacks Consensus Estimate of $1.46. Revenues reached $12.45 billion, exceeding the consensus estimate of $11.77 billion. Reported earnings included a one-time, noncash tax benefit of $0.53 per share.

ONEOK, Inc. Price, Consensus and EPS Surprise

ONEOK, Inc. price-consensus-eps-surprise-chart | ONEOK, Inc. Quote

ONEOK Sees Brazos Driving Growth Into 2027

CEO Pierce Norton identified Brazos as a major contributor to future earnings growth. The acquisition expands ONEOK's Midland Basin operations and creates opportunities to integrate gathering, processing and NGL transportation assets.

Chief commercial officer Sheridan Swords said Brazos volumes were exceeding initial expectations, while producer activity remained encouraging. Management expects approximately 14 rigs to operate on dedicated Brazos acreage during 2027.

During the Q&A session, a UBS analyst questioned acquisition synergies. Swords explained that existing oversized pipelines could eliminate certain planned infrastructure investments, improving capital efficiency. Management also highlighted opportunities from stronger-than-anticipated Barnett well performance.

OKE Advances Processing and NGL Expansion Projects

COO Randy Lentz outlined several projects supporting incremental capacity. The company completed 110 million cubic feet per day of Delaware Basin processing expansions during the third quarter.

Additional projects scheduled for 2027 include Bighorn, offering 400 million cubic feet per day of processing capacity, and Cassidy 2, adding approximately 330 million cubic feet per day.

A JPMorgan analyst questioned whether additional fractionation capacity would become necessary. Swords acknowledged available capacity at Medford and noted that the permitted MB-7 project provides another expansion option. Management expects accumulated NGL inventory to support Medford utilization during early 2027.

ONEOK Targets Demand Across Multiple Businesses

Swords reported a 6% year-over-year increase in NGL raw feed throughput, including 16% growth in the Gulf Coast/Permian region. Refined products shipments also rose 6%, supported by gasoline demand and refining activity.

Commercial optimization contributed to stronger refined products and crude results. During the Q&A session, Swords highlighted permanent logistics savings of approximately 10 cents per gallon from liquids blending integration projects.

Natural gas demand represents another opportunity. Management discussed a newly awarded agreement supplying 110 million cubic feet per day to a power plant expansion beginning in May 2028, alongside continuing discussions involving data centers.

OKE Shifts Toward Lower Leverage and Capital Discipline

Hulse emphasized ONEOK's strengthened balance sheet following a $9 billion minority equity investment and the extinguishment of nearly $5.5 billion in debt.

Management lowered its operating leverage target to approximately 3.25 times debt-to-EBITDA or less compared with its previous target of approximately 3.5 times.

Responding to a Goldman Sachs analyst, Hulse said capital spending could approach $3 billion in 2027, then be between $2.5 billion and $3 billion annually thereafter. The company expects to balance expansion investments with shareholder returns.

ONEOK Maintains Focus on Long-Term Growth

Norton reiterated management's target of mid-to-high-single-digit adjusted EBITDA growth over five to seven years from the 2025 base.

Executives emphasized diversified infrastructure opportunities, improving producer activity and financial discipline as priorities entering 2027. Formal 2027 guidance is expected following fourth-quarter results in February.

What OKE's Zacks Rank and Style Scores Indicate

ONEOK currently has a Zacks Rank #4 (Sell), reflecting an unfavorable near-term earnings estimate revision outlook. Its Value Score of B and Growth Score of B indicate comparatively attractive valuation and growth characteristics. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, its Momentum Score of F indicates weak price momentum, while its VGM Score of B reflects favorable combined style characteristics. The unfavorable Zacks Rank warrants caution despite these stronger scores. The company's Zacks Rank may change as analysts revise earnings estimates following the latest quarterly results.