We have maintained our Neutral recommendation on
ONEOK Partners LP
). The partnership currently has a Zacks Rank #3 (Hold).
BROOKFIELD INFR (BIP): Free Stock Analysis
ONEOK PARTNERS (OKS): Free Stock Analysis
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Why the Reiteration?
In the fourth quarter and full year of 2012, ONEOK Partners'
earnings per unit and revenues surpassed the Zacks Consensus
Estimates. The outperformance was primarily attributed to strong
results from natural gas gathering and processing, and natural
gas pipelines segments.
We have recognized several catalysts including the partnership's
geographically diversified gas assets and capital structure
rebalancing. All these are expected to boost the future
performance of ONEOK Partners.
In addition, the partnership continues to pursue an organic
growth strategy and plans to invest $4.7-$5.3 billion in several
internal projects in the 2011 to 2015 time frame. The partnership
owns and operates the majority of its gathering assets in the
Williston Basin, Cana-Woodford Shale, Woodford Shale and Granite
Wash areas, where it has several projects ongoing. Naturally, we
expect ONEOK Partners' future growth to come primarily from these
However, fluctuating commodity prices, volatile equity and credit
markets and stringent regulations are likely to weigh on the
partnership's forthcoming performance.
The Zacks Consensus Estimate for first-quarter 2013 currently
stands at 62 cents per unit, down 31.87% year over year primarily
due to low estimated natural gas and natural gas liquids (NGL)
pricing, and lower-than-anticipated NGL exchange margins in the
Rocky Mountain region.
Other Stocks to Consider
Other stocks in the sector that are presently performing well
Rose Rock Midstream L.P.
Summit Midstream Partners, LP
Brookfield Infrastructure Partners L.P.
). All three stocks carry a Zacks Rank #1 (Strong Buy).