Wolfe Research Downgrades ONEOK to Peer Perform
On February 25, 2025, Wolfe Research downgraded ONEOK Inc (NYSE: OKE) from Outperform to Peer Perform, removing its previous bullish stance on the midstream energy company. The downgrade comes on the heels of ONEOK’s fourth-quarter 2025 earnings report and what the firm views as underwhelming guidance for fiscal 2026. No specific price target was issued alongside the new rating.
Why the Rating Changed
Wolfe Research’s downgrade was driven by two primary concerns: weak fourth-quarter results relative to expectations and disappointing fiscal 2026 guidance.
ONEOK reported Q4 2025 revenue of $9.07 billion, representing a 29.5% increase year over year, and the company’s Q4 earnings per share topped analyst estimates. Full-year 2025 results reflected double-digit earnings growth, and management recently raised the dividend — all signs of a company performing well on an absolute basis. However, several factors appear to have tempered Wolfe Research’s outlook:
- Margins under pressure: Despite strong top-line revenue growth, reports indicate that margins dipped in Q4, suggesting that revenue gains did not fully translate into bottom-line improvements.
- 2026 guidance signals a slowdown: ONEOK’s 2026 outlook guided for steady earnings alongside a $3 billion capital expenditure plan. Management described the guidance as reflecting discipline around commodity-price assumptions. However, after a period of rapid growth fueled by acquisitions and expansion, the deceleration appears to have been sharper than Wolfe Research anticipated. As one headline put it, ONEOK’s recent “growth spurt” is “slowing to a crawl in 2026.”
- Reacceleration remains uncertain: While ONEOK management indicated that the 2026 guidance still incorporates growth contributions, the question of when — or whether — a meaningful reacceleration in earnings growth will materialize is now front and center for investors.
The move to a Peer Perform rating suggests that Wolfe Research no longer sees a compelling reason to favor ONEOK over its midstream peers at current levels, given the near-term growth deceleration and lack of visibility on a return to the robust expansion the company delivered in 2025.
ONEOK’s Dividend: Still a Key Draw for Income Investors
Despite the downgrade, ONEOK’s dividend profile remains a notable feature for income-focused investors. The stock currently pays an annual dividend of $4.16 per share, which translates to a dividend yield of approximately 5.02%. The most recent ex-dividend date was February 1, 2026.
ONEOK recently raised its dividend, underscoring management’s confidence in the company’s cash flow generation. Analysts covering the company have noted that ONEOK has “plenty of fuel to continue increasing its high-yielding dividend,” even as the pace of earnings growth moderates in 2026. The company’s $3 billion capital expenditure plan for 2026 suggests it continues to invest in future growth, which could support further dividend increases down the road — provided those investments generate the expected returns.
For dividend investors, the 5% yield is attractive relative to many large-cap equities, but the Wolfe Research downgrade serves as a reminder that yield alone does not tell the full story. Growth in distributable cash flow and earnings will be critical to sustaining and growing that payout over time.
Looking Ahead
ONEOK remains one of North America’s largest midstream operators with significant scale advantages and exposure to natural gas liquids and natural gas gathering, processing, and transportation. Some analysts have pointed to potential long-term tailwinds, including increased energy demand from AI-related data center buildouts. However, in the near term, the pace of growth is clearly moderating, and the stock’s re-rating will likely depend on whether management can deliver upside to its current 2026 guidance or articulate a credible path to reacceleration.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.