Using an unlevered Free Cash Flow to Firm (FCFF) model, we project ONEOK, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -0.7% to 10.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 32, DPO 39, DIO 16). At a 6.9% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 14.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $129.99 per share, suggesting OKE is undervalued by 38.6% at the current price of $93.76.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 4,028 | 4,297 | 4,071 | 4,084 | 4,503 | 4,616 |
| (−) Net Interest | 1,546 | 1,649 | 1,562 | 1,568 | 1,729 | 1,772 |
| (+) D&A | 1,733 | 2,089 | 2,376 | 2,557 | 2,654 | 2,721 |
| EBITDA | 7,307 | 8,035 | 8,009 | 8,208 | 8,886 | 9,108 |
| (−) Tax | 959 | 1,023 | 969 | 972 | 1,072 | — |
| (−) CapEx | 2,473 | 2,639 | 2,500 | 2,508 | 2,765 | — |
| (−) ΔWC | 160 | 86 | -72 | 4 | 133 | — |
| Free Cash Flow (FCF) | 3,715 | 4,288 | 4,613 | 4,724 | 4,916 | — |
| Peers' EBITDA Multiple | 14.7x | |||||
| Terminal Value | 133,802 | |||||
| WACC / Discount Rate | 6.86% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 3,594 | 3,882 | 3,908 | 3,746 | 3,647 | 96,042 |
| Enterprise Value | 114,819 | |||||
| Projection Period | 18,777 | 16.4% | ||||
| Terminal Value | 96,042 | 83.6% | ||||
| (−) Current Net Debt | 32,738 | |||||
| Equity Value | 82,081 | |||||
| (÷) Outstanding Shares | 631M | |||||
| Fair Price | $130 | +38.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 10.7x | 12.7x | 14.7x | 16.7x | 18.7x |
|---|---|---|---|---|---|
| 4.9% | $101 | $124 | $147 | $169 | $192 |
| 5.9% | $95 | $116 | $138 | $160 | $181 |
| 6.9% | $89 | $109 | $130 | $151 | $171 |
| 7.9% | $83 | $103 | $122 | $142 | $162 |
| 8.9% | $77 | $96 | $115 | $134 | $153 |
Current price: $93.76. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.