Hess Midstream Partners (HESM) AI Stock Analysis

• Market Cap: $8.20B
• Dividend Yield: 8.45%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.49
• 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: 1,286,320
• 30 Day Avg. Volume: 1,482,836
• 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: 1.47
• Enterprise Value/Revenue: 7.45
• Enterprise Value/Gross Profit: 9.94
• Enterprise Value/Ebitda: 9.75
• 1Y Price Target: $38.50
• Price Target Upside: -2.51% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): 2.8
• Revenue Forecast (FY): $1.62B

• Rating: 73 Outperform
• Price Target: $43.00 ▲(8.89% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is driven primarily by strong profitability and cash generation, reinforced by constructive guidance for higher free cash flow and shareholder returns. The main constraint is elevated leverage on the balance sheet, while technicals are positive but appear overextended, raising near-term volatility risk.

Positive Factors

Strong free cash flow generation

Sustained and improving free cash flow provides durable internal funding for distributions, buybacks and debt reduction. With FCF conversion near mid‑70s% and a large projected FCF pool, HESM can materially repay debt and fund shareholder returns without relying on capital markets.

Very high operating margins

Exceptionally strong EBITDA and improving net margins reflect structural operating leverage and efficiency in midstream assets. High margins create lasting cash buffer versus peers, improving resilience to commodity swings and supporting deleveraging and capital allocation priorities over multiple years.

Durable revenue protection via MVCs and fee contracts

Extensive MVCs and fixed‑fee contracts materially reduce commodity exposure and revenue volatility, giving multi‑year cash visibility. This structural contract mix supports predictable margins and funds targeted distribution growth and debt paydown even if volumes fluctuate seasonally.

Negative Factors

Elevated leverage and thin equity

High leverage materially limits financial flexibility and raises refinancing and covenant risk over the medium term. Even with strong cash flow, elevated debt amplifies downside volatility, constrains strategic investments, and means deleveraging must be sustained to avoid capital structure stress.

Volume seasonality and interruptible volumes

Operational exposure to weather, maintenance and variable third‑party volumes creates persistent quarter-to-quarter revenue swings. This structural seasonality can depress cash flow timing, complicate payout targets and slow sustainable deleveraging despite strong annual FCF averages.

Sponsor/governance concentration risk

Significant sponsor influence and recent board changes tied to a major energy partner can constrain independent decision‑making for minority holders. Governance concentration may bias capital allocation toward sponsor priorities, creating potential conflicts over long‑term strategic choices and cash use.

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 income statement and cash flow profile (high EBITDA margins, improving net margin, and sharply higher 2025 free cash flow), but the balance sheet is a material risk due to very high leverage and thin equity, limiting financial flexibility.

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: 39.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 39.49 is above the 20-day moving average (MA) of 36.84, above the 50-day MA of 35.03, and above the 200-day MA of 35.36, indicating a bullish trend. The MACD of 1.16 indicates Negative momentum. The RSI at 81.82 is Negative, neither overbought nor oversold. The STOCH value of 92.14 is Negative, 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	$15.06B	12.59	12.03%	8.54%	-7.53%	9.74%
DTM	75 Outperform	$14.39B	32.27	9.42%	2.70%	20.39%	-3.85%
WES	74 Outperform	$16.57B	13.97	31.82%	9.13%	5.81%	-13.58%
AM	74 Outperform	$10.84B	26.27	20.22%	4.98%	8.70%	21.42%
HESM	73 Outperform	$8.20B	13.49	64.22%	8.45%	10.78%	19.10%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
KNTK	64 Neutral	$7.58B	17.27	―	8.77%	15.00%	-84.96%

Hess Midstream Partners Corporate Events

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.