Hess Midstream Partners Lp (HESM)
NYSE:HESM
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Hess Midstream Partners
(NYSE:HESM)
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Rating:73Outperform
Price Target:
$44.00
â–²(14.85% Upside)
Action:ReiteratedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Hess Midstream Partners (HESM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.96B
Dividend Yield8.45%
Average Volume (3M)1.35M
Price to Earnings (P/E)12.0
Beta (1Y)0.43
Revenue Growth10.78%
EPS Growth19.10%
CountryUS
Employees176
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.72
Shares Outstanding129,403,240
10 Day Avg. Volume1,306,151
30 Day Avg. Volume1,349,821
Financial Highlights & Ratios
PEG Ratio0.84
Price to Book (P/B)7.47
Price to Sales (P/S)2.62
P/FCF Ratio5.83
Enterprise Value/Market Cap1.46
Enterprise Value/Revenue7.16
Enterprise Value/Gross Profit9.55
Enterprise Value/Ebitda9.37
Forecast
1Y Price Target
$40.67Price Target Upside6.16% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)2.92
Revenue Forecast (FY)$1.61B
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...
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-t...
Hess Midstream Partners Earnings Call Summary
Earnings Call Date:Feb 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook: management reported solid 2025 results (adjusted EBITDA +9% YoY), strong margins (~83%), completion of major infrastructure projects on time and on budget, and a clear path to materially lower capital spending that supports significant free cash flow growth (2026 FCF +12% at midpoint). Lowlights were largely transitory and weather-driven (Q4 and near-term volume pressure, ~$19M revenue decline in Q4, and some maintenance/interruptible volume weakness). High MVC coverage (≈95% in 2026) and explicit capital allocation plans for distributions, share repurchases, and debt paydown materially mitigate downside risk. Overall, positive operational and financial drivers outweigh near-term weather-related challenges.Positive Updates
Full-Year Financial Performance
2025 adjusted EBITDA of $1.238 billion, representing approximately +9% growth versus 2024; full-year net income of approximately $685 million.
Negative Updates
Severe Winter Weather Impact
Severe winter weather through December (continuing into January/February) drove lower volumes versus the prior quarter and suppressed revenues and throughput in Q4 and early 1Q26; management expects lower volumes in the first half of 2026 with seasonal recovery thereafter.
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Financial Performance
2025 adjusted EBITDA of $1.238 billion, representing approximately +9% growth versus 2024; full-year net income of approximately $685 million.
Read all positive updates
Company Guidance
The company reiterated guidance calling for 2026 capital expenditures of about $150 million (a ~40% reduction vs. 2025) and run‑rate CapEx of less than $75 million/year in 2027–2028, targeted 5% annual Class A distribution growth through 2028, and the use of excess free cash flow for incremental buybacks/shareholder returns and debt repayment; they expect 2026 adjusted free cash flow of $850–$900 million (≈12% growth vs. 2025 at the midpoint) with roughly $210 million of excess adjusted FCF after funding the 5% distribution, full‑year 2026 net income of $650–$700 million and adjusted EBITDA of $1.225–$1.275 billion (Q1 2026 net income ~$150–$160 million and adj. EBITDA ~$295–$305 million), a gross adjusted EBITDA margin target of ~75% in 2026 (Q4 was ~83%), MVC coverage of ~95% of revenues in 2026 (90% in 2027, 80% in 2028), ~85% of revenues on fixed‑fee contracts with inflation escalators capped at 3% (≈15% subject to annual redeterminations through 2033), expected annualized adjusted FCF growth of ~10% through 2028 (providing roughly $1 billion of financial flexibility), and an expectation to naturally delever below ~3x as EBITDA grows while not increasing absolute debt.Hess Midstream Partners Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
46
Neutral
Cash Flow
83
Very 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
Neutral
38.31
Price Trends
38.22
Positive
35.81
Positive
35.82
Positive
Market Momentum
0.18
Positive
43.81
Neutral
58.33
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 38.31 is below the 20-day moving average (MA) of 39.39, above the 50-day MA of 38.22, and above the 200-day MA of 35.82, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 43.81 is Neutral, neither overbought nor oversold. The STOCH value of 58.33 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $15.34B | 8.81 | 14.75% | 8.54% | -7.53% | 9.74% | |
75 Outperform | $13.58B | 27.57 | 9.41% | 2.70% | 20.39% | -3.85% | |
74 Outperform | $16.16B | 13.53 | 34.44% | 9.13% | 5.81% | -13.58% | |
74 Outperform | $10.23B | 20.58 | 20.12% | 4.98% | 8.70% | 21.42% | |
73 Outperform | $7.96B | 11.96 | 59.38% | 8.45% | 10.78% | 19.10% | |
69 Neutral | $7.66B | 12.53 | -15.64% | 8.77% | 15.00% | -84.96% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
HESM
Hess Midstream Partners
37.55
3.63
10.70%
PAA
Plains All American
21.59
5.54
34.50%
WES
Western Midstream Partners
40.67
6.62
19.43%
AM
Antero Midstream
21.25
5.23
32.66%
KNTK
Kinetik
47.02
6.87
17.11%
DTM
DT Midstream
132.62
39.76
42.81%
Hess Midstream Partners Corporate Events
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Hess Midstream Announces Unit Repurchase and Share Buyback
Positive
Mar 4, 2026
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, wi...
Business Operations and StrategyRegulatory Filings and Compliance
Hess Midstream Partners Updates Principal Office and Governance Filings
Neutral
Jan 30, 2026
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 Delawar...
Executive/Board Changes
Hess Midstream Partners Announces Board Changes
Neutral
Dec 9, 2025
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....
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.