Goldman Sachs Waxes Optimistic on Natural Gas Stock

Analysts have been a fan of the natural gas name

Managing Editor
Nov 4, 2019 at 10:12 AM
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Natural gas specialist ONEOK, Inc. (NYSE:OKE) is moving higher in today's trading, last seen up 1.1% at $71.05. The equity is enjoying an upgrade to "buy" from "neutral" and an $81 price target at Goldman Sachs. Coming on the heels of a respectable third-quarter report last week, analyst Michael Lapides said his outlook for 2020 through 2022 represents a 5% upside to overall analyst outlook, and "robust returns on new NGL pipeline projects" to drive cash flow. .

This morning's bull note is brushing aside a price-target cut out of UBS to $78 from $80. Most analysts are already bullish, as more than half sport a "buy" or "strong buy" recommendation. What's more, the stock's average 12-month price target $76.10 comes in 7.2% above current levels.

Meanwhile, data at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), shows a preference for calls over puts during the past two weeks of trading. This is per the stock's 10-day call/put volume ratio of 1.95, which ranks in the 76th percentile of its annual range.

Also of note, those looking to bet on ONEOK stock may want to consider options. The equity's Schaeffer's Volatility Index (SVI) is currently at 18%, which registers in the 15th percentile of its annual range -- indicating short-term options are attractively priced at the moment, from a volatility perspective.

On the charts, OKE has had a volatile year. While the equity is still 8% below its Sept. 16 all-time high of $77.21, recent support has emerged at the 200-day moving average. Year-to-date, ONEOK stock has added 31%.

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