UBS analyst Manav Gupta downgraded the rating on Hess Midstream Partners to a Hold today, setting a price target of $43.00.
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Manav Gupta has given his Hold rating due to a combination of factors impacting Hess Midstream Partners. The revised price target of $43 reflects concerns about potential reductions in activity in the Bakken region, particularly if Chevron, a key player, decides to reduce its rig count there. This decision could pose risks to future estimates and potentially lead to a de-rating of the stock.
Despite Hess Midstream Partners’ strong cash returns and a higher-than-peer dividend yield of 7.4%, there are concerns about the sustainability of stock buybacks if Chevron reduces its operations in the Bakken. The recent unexpected increase in oil production by OPEC+ has added pressure on oil prices, contributing to a cautious outlook. Additionally, any strategic shifts by Chevron away from the Bakken could negatively impact the company’s future prospects.