Hess Midstream Partners (HESM) AI Stock Analysis

• Market Cap: $8.22B
• Dividend Yield: 8.45%
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.47
• Revenue Growth: 10.78%
• EPS Growth: 19.10%
• Country: US
• Employees: 176
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.72
• Shares Outstanding: 129,403,240
• 10 Day Avg. Volume: 1,477,366
• 30 Day Avg. Volume: 1,367,784
• PEG Ratio: 0.84
• Price to Book (P/B): 7.47
• Price to Sales (P/S): 2.62
• P/FCF Ratio: 5.83
• Enterprise Value/Market Cap: 1.48
• Enterprise Value/Revenue: 7.50
• Enterprise Value/Gross Profit: 10.00
• Enterprise Value/Ebitda: 9.81
• 1Y Price Target: $39.00
• Price Target Upside: -1.49% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): 2.84
• Revenue Forecast (FY): $1.61B

• Rating: 73 Outperform
• Price Target: $44.00 ▲(11.14% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by strong operating profitability and free-cash-flow strength, supported by positive guidance (lower capex, growing free cash flow, and high MVC coverage). Offsetting these positives are elevated leverage on the balance sheet and technically overbought momentum signals that increase near-term volatility risk.

Positive Factors

Free cash flow generation

HESM’s operating and free cash flow strengthened materially in 2025 (OCF ~$984M; FCF ~$728M) with high conversion (~74%). This durable cash generation underpins distribution coverage, buybacks and debt paydown, allowing sustained capital returns and structural deleveraging over the mid term.

High contracted revenue protection

With ~95% MVC coverage in 2026 and ~85% of revenues on fixed‑fee contracts, HESM materially reduces commodity-price exposure and revenue volatility. This structural contract mix supports predictable cash flows, easing debt service and enabling reliable distribution and buyback planning across commodity cycles.

Lower capital intensity going forward

Completion of major gathering/compression projects and a planned drop to ~$150M capex in 2026 and < $75M thereafter create a structurally lower capital intensity profile. That shift supports sustained higher free cash flow margins and funds growth, distributions and debt reduction without new large projects.

Negative Factors

Very elevated leverage

Balance‑sheet leverage is a persistent constraint: debt-to-equity near ~8.8x in 2025 limits financial flexibility. High absolute leverage increases refinancing and interest risks, amplifies downside in lower commodity or volume scenarios, and constrains the company’s ability to absorb shocks while maintaining payouts.

Seasonal/interruptible volume variability

Operational seasonality and reliance on interruptible third‑party volumes (~10% of volumes) create recurring quarter‑to‑quarter variability. Weather, maintenance and interruptible flows can meaningfully depress near‑term throughput and revenues, reducing predictability of distributable cash despite MVCs and fixed fees.

Sponsor transactions and revolver-funded buybacks

Recent repurchases involved a Chevron affiliate and an accelerated buyback funded via the revolver, raising structural governance and balance‑sheet sensitivity concerns. Using short‑term credit for buybacks and frequent related‑party dealings can heighten leverage timing risk and underscore potential conflicts of interest.

Hess Midstream Partners Business Overview & Revenue Model

Company Description

Hess Midstream LP owns, develops, operates, and acquires midstream assets. The company operates through three segments: Gathering; Processing and Storage; and Terminaling and Export. The Gathering segment owns natural gas gathering and compression; crude oil gathering systems; and produced water gathering and disposal facilities. Its gathering systems consists of approximately 1,350 miles of high and low pressure natural gas and natural gas liquids gathering pipelines with capacity of approximately 450 million cubic feet per day; and crude oil gathering system comprises approximately 550 miles of crude oil gathering pipelines. The Processing and Storage segment comprises Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota; a 50% interest in the Little Missouri 4 gas processing plant located in south of the Missouri River in McKenzie County, North Dakota; and Mentor Storage Terminal, a propane storage cavern and rail, and truck loading and unloading facility located in Mentor, Minnesota. The Terminaling and Export segment owns Ramberg terminal facility; Tioga rail terminal; and crude oil rail cars, as well as Johnson's Corner Header System, a crude oil pipeline header system. Hess Midstream LP was founded in 2014 and is based in Houston, Texas.

How the Company Makes Money

Hess Midstream Partners generates revenue primarily through fee-based contracts for its midstream services, which include gathering, processing, and transporting crude oil and natural gas. The company's revenue model is largely dependent on long-term, take-or-pay contracts with its customers, which ensure a steady cash flow regardless of commodity price fluctuations. Key revenue streams include fees from the transportation of crude oil and natural gas, processing fees from natural gas and NGLs, and storage fees for hydrocarbons. Additionally, partnerships with major energy producers, such as Hess Corporation, provide a stable customer base and contribute significantly to HESM's earnings. The company's strategic asset base and operational efficiency further enhance its profitability.

Hess Midstream Partners Financial Statement Overview

Summary

Strong and improving profitability and cash generation support a solid score (high EBITDA margins and sharply higher 2025 free cash flow), but the balance sheet meaningfully drags results due to very elevated leverage (high debt-to-equity) and limited equity cushion.

Income Statement

Revenue has grown steadily from 2020–2025, with a notable acceleration in 2025 (revenue growth ~68%). Profitability is a clear strength: EBITDA margins have been consistently very high (~68%–77%) and net margin improved meaningfully to ~22% in 2025 (from low single-digits in 2020). The main weakness is some volatility in gross margin (dropping to ~64% in 2025 from mid‑80%s previously), which could signal mix/contract changes or cost pressure despite strong operating profitability.

Balance Sheet

Leverage is the key concern: debt-to-equity remains very elevated (roughly ~6.5x to ~15x across 2020–2025, ~8.8x in 2025), leaving limited balance-sheet flexibility. Equity has improved versus the lowest years but is still small relative to total debt and assets, keeping financial risk high. A positive is strong returns on equity (rising to ~0.83 in 2025), though this is amplified by the high leverage rather than purely operating strength.

Cash Flow

Cash generation is strong and improving: operating cash flow rose to ~$984M in 2025 and free cash flow increased to ~$728M, with a sharp 2025 free-cash-flow growth rate (~218%). Cash flow conversion looks healthy, with free cash flow running at ~67%–79% of net income historically and ~74% in 2025, indicating earnings are supported by cash generation. The primary weakness is year-to-year variability in free cash flow growth (including a slight decline in 2024), but the overall trajectory remains positive.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.62B	1.49B	1.35B	1.27B	1.20B
Gross Profit	1.04B	1.29B	1.15B	1.09B	1.04B
EBITDA	1.24B	1.14B	1.02B	977.80M	903.40M
Net Income	352.90M	223.10M	118.60M	83.90M	46.40M
Balance Sheet
Total Assets	4.39B	4.15B	3.79B	3.59B	3.49B
Cash, Cash Equivalents and Short-Term Investments	1.90M	4.30M	5.40M	3.10M	2.20M
Total Debt	3.77B	3.47B	3.21B	2.89B	2.56B
Total Liabilities	3.95B	3.69B	3.43B	3.06B	2.73B
Stockholders Equity	568.30M	530.70M	340.20M	245.10M	204.10M
Cash Flow
Free Cash Flow	728.20M	634.20M	642.90M	622.90M	632.30M
Operating Cash Flow	983.80M	940.30M	866.40M	861.10M	795.50M
Investing Cash Flow	-255.60M	-306.10M	-223.50M	-238.20M	-163.20M
Financing Cash Flow	-730.60M	-635.30M	-640.60M	-622.00M	-632.70M

Hess Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HESM, the sentiment is Positive. The current price of 39.59 is above the 20-day moving average (MA) of 39.02, above the 50-day MA of 36.66, and above the 200-day MA of 35.59, indicating a bullish trend. The MACD of 0.80 indicates Positive momentum. The RSI at 66.95 is Neutral, neither overbought nor oversold. The STOCH value of 60.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HESM.

Hess Midstream Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAA	78 Outperform	$15.29B	8.81	14.75%	8.54%	-7.53%	9.74%
DTM	75 Outperform	$13.42B	27.57	9.41%	2.70%	20.39%	-3.85%
WES	74 Outperform	$16.40B	13.53	34.44%	9.13%	5.81%	-13.58%
AM	74 Outperform	$10.72B	20.58	20.12%	4.98%	8.70%	21.42%
HESM	73 Outperform	$8.22B	11.96	59.38%	8.45%	10.78%	19.10%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
KNTK	64 Neutral	$7.44B	12.53	-15.64%	8.77%	15.00%	-84.96%

Hess Midstream Partners Corporate Events

Hess Midstream Announces Unit Repurchase and Share Buyback

On March 2, 2026, Hess Midstream LP and its operating subsidiary agreed to repurchase 455,811 Class B units from Chevron affiliate Hess Investments North Dakota LLC for about $18 million, at a price aligned with the March 2 Class A share close, with the units to be cancelled after closing on March 4, 2026. The transaction, funded through the existing revolver, was unanimously approved by the general partner’s board and conflicts committee, slightly increasing the public float while reducing Chevron’s consolidated stake.

Also on March 2, 2026, Hess Midstream entered into a $42 million accelerated share repurchase with JPMorgan Chase Bank to buy back Class A shares, receiving an initial 744,492 shares, or roughly 70% of the expected total, with final settlement due in March 2026. Combined with the sponsor unit buyback, the $60 million program is designed to cancel securities and boost distributable cash flow per Class A share, supporting distribution growth above the company’s at least 5% annual target through 2028 and reinforcing its capital-return and balance-sheet strategy.

The most recent analyst rating on (HESM) stock is a Buy with a $42.00 price target. To see the full list of analyst forecasts on Hess Midstream Partners stock, see the HESM Stock Forecast page.

Hess Midstream Partners Updates Principal Office and Governance Filings

Effective January 26, 2026, Hess Midstream LP, its general partner Hess Midstream GP LP, and operating subsidiary Hess Midstream Operations LP changed their principal office address to 1400 Smith Street in Houston, Texas, and shifted their Delaware registered agent to Corporation Service Company with a new registered office in Wilmington. To formalize these administrative moves, the general partners executed amendments and an amended and restated certificate of limited partnership, which were filed with the Delaware Secretary of State on January 27, 2026, updating partnership agreements and partner address schedules without altering economic rights or adversely affecting limited partners, underscoring that the changes are organizational and governance-related rather than strategic or operational in nature.

The most recent analyst rating on (HESM) stock is a Hold with a $38.00 price target. To see the full list of analyst forecasts on Hess Midstream Partners stock, see the HESM Stock Forecast page.

Hess Midstream Partners Announces Board Changes

On December 4, 2025, Hess Midstream Partners, a company managed by Hess Midstream GP LLC, announced changes in its Board of Directors. Andrew B. Walz resigned from the Board following his appointment as an executive officer at Chevron Corporation. His resignation was not due to any disagreements with the company. Kristi H. McCarthy was designated as the new Chairman of the Board, and Barbara F. Harrison, a vice president at Chevron U.S.A. Inc., was appointed as a new board member. Harrison’s appointment aligns with Chevron’s influence over the board, as Chevron indirectly owns the entities controlling Hess Midstream Partners.

The most recent analyst rating on (HESM) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on Hess Midstream Partners stock, see the HESM Stock Forecast page.