Hess Midstream Partners (HESM) AI Stock Analysis

• Market Cap: $8.67B
• Dividend Yield: 6.95%
• Average Volume (3M): 1.60M
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.49
• Revenue Growth: 9.02%
• EPS Growth: 17.28%
• Country: US
• Employees: 176
• Sector: Energy
• Sector Strength: 67
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.74
• Shares Outstanding: 131,084,600
• 10 Day Avg. Volume: 1,070,631
• 30 Day Avg. Volume: 1,604,824
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 5.45
• Enterprise Value/Gross Profit: 6.30
• Enterprise Value/Ebitda: 7.17
• 1Y Price Target: $45.80
• Price Target Upside: 12.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 80 Outperform
• Price Target: $48.00 ▲(17.79% Upside)

Hess Midstream Partners scores well due to strong financial performance, attractive valuation, and positive earnings call guidance. The company's strategic initiatives, such as the repurchase agreement, further bolster its position. However, the rising debt levels and anticipated higher costs slightly temper the overall score.

Positive Factors

Dividend and Return

Analyst's recommendation for HESM is at Equal-weight, with a price target reflecting a 29.0% one-year, total-return upside including a 7.4% dividend yield.

Strategic Transactions

A potential buy-in transaction by Chevron could enable the company to gain more direct control of its midstream operations, allow for better upstream integration, and modestly reduce operating costs.

Negative Factors

Oil Prices

The main risk to the thesis is oil prices falling below $60 per barrel, which could lead to reduced drilling activity and slower growth.

Hess Midstream Partners Business Overview & Revenue Model

Company Description

Hess Midstream Partners LP (HESM) is a leading provider of integrated midstream services to the oil and gas industry, primarily focused on the Bakken shale formation in North Dakota. The company operates through three main sectors: gathering and processing, transportation, and terminaling and storage. Hess Midstream offers a range of services including the transportation of crude oil, natural gas, and produced water, as well as processing facilities that separate hydrocarbons and manage byproducts.

How the Company Makes Money

Hess Midstream generates revenue through a fee-based model, which is primarily structured around long-term contracts with customers. The company earns money by charging fees for its gathering and processing services, as well as transportation and terminaling services. Key revenue streams include fixed fees for throughput volumes, which provide predictable cash flow regardless of commodity price fluctuations, and variable fees that can depend on the volume of oil and gas processed or transported. Significant partnerships with Hess Corporation, which is a major oil producer in the Bakken region, contribute to stable earnings, as they ensure a consistent demand for Hess Midstream's services. Additionally, the company benefits from investments in infrastructure that enhance operational efficiency and capacity, further supporting its revenue generation capabilities.

Hess Midstream Partners Financial Statement Overview

Summary

Hess Midstream Partners demonstrates strong profitability and efficient cash flow management, with robust EBIT and EBITDA margins. However, the high debt-to-equity ratio poses a financial risk, which is partially offset by strong return on equity and stable asset base.

Income Statement

Hess Midstream Partners demonstrates strong profitability with consistently high gross and net profit margins over the years. The company has shown a positive revenue growth trend, with a notable increase from the previous year. EBIT and EBITDA margins are robust, reflecting efficient operational performance.

Balance Sheet

The balance sheet indicates a high level of debt relative to equity, with a rising debt-to-equity ratio, which could pose a financial risk. However, the company maintains a reasonable equity ratio, showing a stable asset base. Return on equity remains strong, indicating effective use of shareholder funds.

Cash Flow

Hess Midstream Partners has shown strong cash flow management with consistent free cash flow generation. The operating cash flow to net income ratio suggests healthy cash conversion. However, the free cash flow growth has seen some fluctuations, which could be an area of concern if it persists.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.52B	1.49B	1.35B	1.27B	1.20B	1.09B
Gross Profit	1.31B	1.29B	1.15B	1.09B	1.04B	934.70M
EBITDA	1.15B	1.14B	1.02B	977.80M	903.40M	743.60M
Net Income	250.10M	223.10M	118.60M	83.90M	46.40M	24.00M
Balance Sheet
Total Assets	4.26B	4.15B	3.79B	3.59B	3.49B	3.37B
Cash, Cash Equivalents and Short-Term Investments	6.10M	4.30M	5.40M	3.10M	2.20M	2.60M
Total Debt	3.57B	3.47B	3.21B	2.89B	2.56B	1.91B
Total Liabilities	3.75B	3.69B	3.43B	3.06B	2.73B	2.05B
Stockholders Equity	601.30M	530.70M	340.20M	529.00M	753.10M	1.33B
Cash Flow
Free Cash Flow	660.60M	634.20M	642.90M	622.90M	632.30M	340.60M
Operating Cash Flow	957.40M	940.30M	866.40M	861.10M	795.50M	641.70M
Investing Cash Flow	-296.80M	-306.10M	-223.50M	-238.20M	-163.20M	-301.00M
Financing Cash Flow	-658.70M	-635.30M	-640.60M	-622.00M	-632.70M	-341.40M

Hess Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 40.75
• 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 Neutral. The current price of 40.75 is below the 20-day moving average (MA) of 41.34, above the 50-day MA of 39.96, and above the 200-day MA of 38.02, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 48.01 is Neutral, neither overbought nor oversold. The STOCH value of 34.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HESM.

Hess Midstream Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HESM	80 Outperform	$8.67B	15.32	52.91%	6.95%	9.02%	17.28%
AM	78 Outperform	$8.66B	18.99	21.65%	4.93%	7.09%	17.53%
WES	77 Outperform	$14.67B	11.84	38.42%	9.38%	7.11%	-16.14%
DTM	69 Neutral	$10.70B	28.11	8.48%	2.95%	15.28%	-9.99%
PAA	68 Neutral	$12.27B	19.26	8.34%	8.36%	-4.31%	-17.80%
Sector *	65 Neutral	$15.28B	7.48	3.19%	5.33%	4.10%	-60.58%
KNTK	58 Neutral	$6.91B	57.29	-8.21%	7.44%	16.09%	-71.69%

Hess Midstream Partners Corporate Events

Hess Midstream Partners Announces Leadership Change

On September 4, 2025, John A. Gatling resigned as President and COO of Hess Midstream GP LLC, effective September 26, 2025. Michael S. Bast was appointed as his successor. Mr. Bast, who has been with Hess since 2007 and has held various roles, will also become an employee of Chevron U.S.A. Inc. on October 1, 2025. His appointment is expected to continue the company’s focus on efficient operations in the Bakken region, with no additional compensation from Hess Midstream for his role.

Hess Midstream Announces $100 Million Repurchase Agreement

On August 4, 2025, Hess Midstream LP announced a $100 million repurchase agreement, including the repurchase of $30 million in Class B units from Chevron’s subsidiary and $70 million in Class A shares from the public. This strategic move, approved by the board and its conflicts committee, is part of Hess Midstream’s financial strategy to return capital to shareholders, potentially increasing distributable cash flow per share and providing capacity for distribution growth above the annual target through 2027.

Hess Midstream Announces Leadership Changes Post-Merger

On July 18, 2025, following the merger between Hess Corporation and Chevron Corporation, Hess Midstream announced significant changes to its Board of Directors and executive leadership. John B. Hess and other key executives resigned from the Board, with Chevron’s Andy Walz appointed as Chairman alongside new members Kristen Ghattas and Kristi McCarthy. Jonathan C. Stein was named CEO, succeeding John B. Hess, and Michael J. Chadwick was appointed CFO. These changes reflect Chevron’s increased influence, owning approximately 37.8% of Hess Midstream, and aim to enhance shareholder value and operational performance.