ONEOK Doubles Synergy Targets to $707M, Guiding $8.1B EBITDA
ONEOK achieved $475 million in cumulative EBITDA synergies through 2025—over twice its $200 million target—and total identified synergies reached $707 million including non-cash savings. Management guides 2026 EBITDA at $8.1 billion—potentially above $8.5 billion if WTI averages $65—and trades at 10.8x forward EV/EBITDA with a 4.9% dividend yield.
1. Synergy Outperformance
ONEOK surpassed its $200 million annual synergy target by realizing $475 million in EBITDA synergies through 2025. Including non-cash compensation and supply chain efficiencies, total identified synergies reached $707 million, demonstrating integration benefits well beyond initial forecasts.
2. 2026 EBITDA Guidance
The company projects $8.1 billion of EBITDA for 2026 based on conservative $57.50 WTI assumptions. If WTI averages $65, EBITDA could exceed $8.5 billion, driven by $335 million of volume growth, synergies and project completions offsetting $375 million of commodity headwinds.
3. Valuation and Returns
At 10.8x forward EV/EBITDA, ONEOK trades below its five-year average and peers like Williams and Kinder Morgan, while offering a 4.9% dividend yield and 34% annual dividend growth. A 12x multiple on mid-2026 EBITDA guidance implies a $106 per‐share fair value, over 20% upside.
4. Capital Structure and Tax Benefits
Leverage stands at 3.8x Debt/EBITDA with interest coverage of 3.3x, but $3.1 billion of debt was retired in 2025. A $3.0 billion tax basis step-up delays cash taxes until 2029, enhancing free cash flow for debt reduction and shareholder returns during integration.