ONEOK, Inc. (NYSE:OKE) is scheduled to report Q3 earnings results after markets close for trading on October 27, 2020.
The company is expected to report earnings of $0.58/share on revenue of $2.585 billion. The consensus earnings per share (EPS) of $0.58/share is based on a poll of 15 analysts and represents a decline in eps of −21.6% over the same quarter last year, when the company reported earnings of $0.74/share.
The revenue forecast of $2.585 billion based on a poll of 7 analysts implies a year-over-year (YoY) growth in revenue of 14.2%. Last year the company reported $2.263 billion in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $2,584.51 | $2,263.23 | 14.2% |
| EPS | $0.58 | $0.74 | −21.6% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.
What are your expectations from ONEOK, Inc. for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.50 | $0.32 | −36.6% | Missed |
| Q1, 2020 | $0.81 | $0.83 | 3.0% | Beat |
| Q4, 2019 | $0.78 | $0.77 | −0.7% | Missed |
| Q3, 2019 | $0.75 | $0.74 | −1.5% | Missed |
| Q2, 2019 | $0.71 | $0.75 | 5.8% | Beat |
| Q1, 2019 | $0.73 | $0.81 | 10.7% | Beat |
| Q4, 2018 | $0.74 | $0.70 | −5.0% | Missed |
| Q3, 2018 | $0.72 | $0.75 | 4.9% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 6.1%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| July 28, 2020 | $28.02 | $29.72 | 6.1% | Increase |
| April 28, 2020 | $28.52 | $30.92 | 8.4% | Increase |
| February 24, 2020 | $77.06 | $73.61 | −4.5% | Decline |
| October 29, 2019 | $71.18 | $69.99 | −1.7% | Decline |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.02, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.02 implies a 0.1% chance of earnings manipulation.
Fundamentals And Technical Analysis
ONEOK, Inc. is currently trading at $28.92/share, up 2.2% for the day. The company is trading at approximately 36.9% of its 52-week high of $78.48/share. The company’s stock price is down −2.7% since the last earnings report and down −3.4% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 56.00 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 20.69 and a forward P/E multiple of 12.37.
ONEOK, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.06. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $28.92 |
| P/E Ratio | 20.7x |
| P/E Ratio (Fwd) | 12.4x |
| PEG Ratio | −0.4 |
| Total Debt / Total Capital | 53.8% |
| Levered Free Cash Flow | -$1.957 billion |
| EV / EBITDA | 11.0x |
ONEOK, Inc. is a large-cap stock with a market capitalization of $12.846 billion and a total enterprise value of $26.558 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.
ONEOK, Inc., together with its subsidiaries, engages in gathering, processing, storage, and transportation of natural gas in the United States. It operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. The company owns natural gas gathering pipelines and processing plants in the Mid-Continent and Rocky Mountain regions. It also gathers, treats, fractionates, and transports natural gas liquids (NGL), as well as stores, markets, and distributes NGL products. The company owns NGL gathering and distribution pipelines in Oklahoma, Kansas, Texas, New Mexico, Montana, North Dakota, Wyoming, and Colorado; terminal and storage facilities in Missouri, Nebraska, Iowa, and Illinois; and NGL distribution and refined petroleum products pipelines in Kansas, Missouri, Nebraska, Iowa, Illinois, and Indiana, as well as owns and operates truck- and rail-loading, and -unloading facilities that interconnect with its NGL fractionation and pipeline assets. In addition, it operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities. Further, the company owns and operates a parking garage in downtown Tulsa, Oklahoma; and leases excess office space to others. It serves integrated and independent exploration and production companies; NGL and natural gas gathering and processing companies; crude oil and natural gas production companies; propane distributors; ethanol producers; and petrochemical, refining, and NGL marketing companies, as well as natural gas distribution companies, electric-generation facilities, industrial companies, municipalities, producers, processors, and marketing companies. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.
