Citigroup Boosts ONEOK to Buy

From Standard & Poor's Equity ResearchCitigroup upgraded its investment recommendation on shares of ONEOK (OKE

) to buy from hold. The firm also lifted its earnings estimates on the utility.

Analyst Faisel Khan says he's revising EPS estimates for ONEOK: from $2.11 to $2.33 for 2006; from $2.09 to $2.51 for 2007; and from $2.09 to $2.63 for 2008. He says three key drivers for the shares include: 1) potential share buyback from redeployment of over $800 million of cash from the company's recent assets sales (adding 22 cents per share in 2007, and 35 cents in 2008, assuming $750 million of share repurchases); 2) rate relief in Kansas (adding 22 cents in 2007); and 3) over $860 million of capital expansion projects in coming years (adding 6 cents in 2008 and 9 cents in 2009). The analyst raised his $33 12-month price target to $40.