ONEOK's Stock Slump Highlights Acquisition Costs Amid Fee-Based Resilience

What happened

ONEOK's stock fell 27% in 2025, driven by costs from aggressive multibillion-dollar acquisitions like Magellan and EnLink. The DeepValue report confirms these deals have expanded its diversified midstream platform to ~90% fee-based earnings, supporting durable cash flows with ~$5.0B operating income in 2024. However, high leverage at 4.79x net debt/EBITDA and integration risks pose significant challenges, as noted in SEC filings. The Motley Fool article predicts a parabolic rise in 2026, but this optimism overlooks the execution hurdles and balance sheet strain evident in recent disclosures. Investors must critically assess whether growth can outweigh these financial pressures.

Implication

The stock's 2025 decline reflects market skepticism over acquisition costs, which could linger if integration falters or capital spending overshoots. ONEOK's fee-based model and diversified assets offer stability, but sustained recovery hinges on executing its $2.8–$3.2B capex plan and maintaining ~90% fee-based earnings. High leverage at 4.79x net debt/EBITDA requires vigilant monitoring, as any deterioration could threaten investment-grade ratings and increase financing costs. The article's parabolic prediction is speculative; instead, focus on quarterly metrics like throughput trends, capex adherence, and debt reduction progress. Ultimately, patient investors may find value if management delivers on integration and leverage improvement, but near-term volatility is likely.

Thesis delta

The DeepValue BUY thesis remains unchanged, emphasizing fee-based durability and growth catalysts while flagging leverage and execution as key risks. The article's bullish spin adds hype but does not alter the core analysis; it merely highlights the disconnect between speculative optimism and the sobering realities in SEC filings. Investors should maintain a cautious stance, prioritizing data from filings over promotional narratives until tangible progress on debt reduction and project execution is demonstrated.