UPDATE: Goldman Sachs Upgrades OneOk Partners, Maintains OneOk Inc On Investment In Bakken NGL Midstream Projects

In a report published Wednesday, Goldman Sachs analyst Theodore Durbin upgraded OneOk Partners OKS from a Sell rating to a Neutral rating and raised the the price target from $55.00 to $57.00 and remained a Neutral rating on OneOk Inc OKE and raised the price target from $58.00 to $59.00. In the report, Goldman Sachs says "We upgrade ONEOK Partners (OKS) to Neutral from Sell and raise our 12- month yield-based target price. After market close, OKS announced plans to invest an additional $650-780m in Bakken NGL midstream projects (13% project backlog increase). On the announcement, we lower our 2015 distributable cash flow (DCF) estimate for OKS by 5% on higher financing costs, maintain 2016, but raise our 2017 estimate by 6% assuming 6x EBITDA multiple project returns, similar to other “bolt-on” organic returns. We raise our 12-month target price for OKS to $57 (from $55) on increased cash flow visibility. Since adding OKS to the Sell list on April 9, 2013, its units have declined 6.6% (vs. -1.5% AMZ and +14.2% S&P 500). We adjust our 2014/2015/2016 estimates for OKE by -0.1%/-1.8%/+1.8% on changes to OKS estimates and financing. We raise our EV/EBITDA and SOTP-based 12- month target price for OKE by $1 to $59, driven by our higher OKS estimates." OneOK Partners closed on Wednesday at $52.75, and OneOk Inc closed on Wednesday at $57.08.