UPDATE: Morgan Stanley Reiterates Overweight Rating, Raises PT on Oneok

In a report published Wednesday, Morgan Stanley reiterated its Overweight rating on Oneok OKE, and raised its price target from $48.00 to $50.00. Morgan Stanley noted, “OKE continues to benefit from a vertically integrated asset base at OKS, offsetting weakness in the Energy Services Segment and lower overall NGL prices. We have modestly revised our EPS estimates to reflect lower guidance (net income of $345-375 vs. $360-410 previously), but believe OKE remains on track for 18% dividend growth in both 2012 and 2013. This growth trajectory coupled with a high free cash flow (FCF) yield (~6% by FY 2014) creates optionality for OKE to pursue further shareholder-friendly initiatives. While headwinds could keep the stock somewhat range-bound near-term, we remain Overweight and see another leg up upon further execution.” Oneok closed on Tuesday at $44.51.