UPDATE: Jefferies Initiates Coverage on ONEOK with Hold Rating, $56 PT Ahead of ONE Gas Spin-Off

In a report published Wednesday, Jefferies analyst Christopher Sighinolfi initiated coverage on

with a Hold rating and $56.00 price target. In the report, Jefferies noted, “Following the planned spin-off of its gas distribution operations into ONE Gas, OKE will offer unfettered leverage to OKS IDRs & peer-leading dividend growth. However, shares are up ~20% since the announced restructuring, swiftly capturing the value inherent in the transaction. Despite a projected ~15% 5-year dividend CAGR (2012-17), at current levels we believe OKE offers a balanced risk/reward. Hence, we are initiating with a Hold.” ONEOK closed on Tuesday at $51.44.