Jefferies downgrades U.S. pipeline operator ONEOK OKE.N to "hold" from "buy".
It also cut its price target to $95 from $100, representing an upside of 2.2% to the stock's last close on Thursday.
The downgrade is driven by fading confidence in a meaningful acceleration in Bakken growth despite the recent oil-price rally, as producers continue to prioritize capital discipline, returns and flat production in the maturing basin.
Bakken is one of the largest oil-producing regions in the U.S., and a key market for ONEOK's midstream business.
"Separately, Waha has inflected positive, likely capping marketing upside through rest of year; thus we see less likelihood of further guidance raises" - Jefferies.
Limited room for gains as growth outlook stays modest
Jefferies added that potential fee pressure in the Bakken and OKE's premium valuation leave limited room for gains, given its modest growth outlook.
12 out of 22 brokerages rate the stock "buy" or higher and 10 "hold"; their median price target is $95 - data compiled by LSEG.
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