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Hess Midstream Partners
(NYSE:HESM)
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Rating:75Outperform
Price Target:
$45.00
â–²(10.73% Upside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by strong cash-flow generation and profitability, supported by a constructive technical trend and an attractive income/valuation setup (high dividend yield with a moderate P/E). The main risks limiting the score are high leverage and mixed near-term fundamentals/growth signals, including the TTM revenue drop and guidance implying flat EBITDA with some second-half execution and cost-phasing sensitivity.
Positive Factors
Fee‑based, contract-driven midstream model
A predominately fee-based commercial model tied to gathering, processing, terminaling and water services creates durable, predictable cash flows less exposed to commodity price swings. Long-term contracts and minimum commitments support steady throughput fees and stable revenue over multi-year horizons.
Negative Factors
Elevated leverage and refinancing exposure
High absolute debt and an elevated debt-to-equity ratio reduce financial flexibility and raise refinancing and interest‑rate risk if market conditions tighten. While cash flow is strong, elevated leverage limits capacity for growth investments and amplifies downside in periods of lower throughput or rising rates.
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Positive Factors
Negative Factors
Fee‑based, contract-driven midstream model
A predominately fee-based commercial model tied to gathering, processing, terminaling and water services creates durable, predictable cash flows less exposed to commodity price swings. Long-term contracts and minimum commitments support steady throughput fees and stable revenue over multi-year horizons.
Read all positive factors
Hess Midstream Partners (HESM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.37B
Dividend Yield7.61%
Average Volume (3M)925.64K
Price to Earnings (P/E)14.0
Beta (1Y)0.26
Revenue Growth2.78%
EPS Growth7.61%
CountryUS
Employees195
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)2.90
Shares Outstanding128,350,880
10 Day Avg. Volume790,892
30 Day Avg. Volume925,644
Financial Highlights & Ratios
PEG Ratio0.84
Price to Book (P/B)7.47
Price to Sales (P/S)2.63
P/FCF Ratio5.83
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$36.75Price Target Upside-9.57% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering4
EPS Forecast (FY)2.89
Revenue Forecast (FY)$1.61B
Hess Midstream Partners Business Overview & Revenue Model
Company Description
Hess Midstream LP specializes in the ownership, development, operation, and acquisition of energy infrastructure assets positioned midstream in the value chain. The company organizes its business activities into three distinct operational segments...
How the Company Makes Money
HESM makes money primarily by charging fees under long-term, contract-based arrangements for midstream services across several integrated systems. Key revenue streams include: (1) Gas gathering and processing: fees for gathering natural gas from w...
Hess Midstream Partners Earnings Call Summary
Earnings Call Date:Aug 03, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and financial picture: strong margins (85%), reiterated robust adjusted free cash flow guidance (+20% YoY at midpoint), sequential net income and EBITDA improvement, active debt reduction and a clear plan to return excess cash to shareholders. Near-term headwinds include phased maintenance driving higher Q3 OpEx, a small sequential decline in adjusted free cash flow, and flat-to-lower oil throughput. Guidance is conservative on EBITDA due to weather and execution sensitivity, but capital efficiency and liquidity improvements underpin a constructive outlook.Positive Updates
Reiterated 2026 Adjusted Free Cash Flow Guidance (Strong Growth)
Company re-affirmed 2026 adjusted free cash flow guidance of $910M to $960M, which implies a ~20% year-over-year increase at the midpoint versus 2025. Management emphasized this as a key financial priority to fund distributions, share repurchases and debt reduction.
Negative Updates
Oil Throughput Flat to Lower
Q2 throughput volumes: gas processing ~433 MMcf/d, crude terminaling ~117,000 bbl/d, water gathering ~121,000 bbl/d. Compared to Q1, oil throughput was flat to lower while gas increased; oil softness/flatness is a near-term headwind to crude-related revenue growth.
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Q2-2026 Updates
Positive
Negative
Reiterated 2026 Adjusted Free Cash Flow Guidance (Strong Growth)
Company re-affirmed 2026 adjusted free cash flow guidance of $910M to $960M, which implies a ~20% year-over-year increase at the midpoint versus 2025. Management emphasized this as a key financial priority to fund distributions, share repurchases and debt reduction.
Read all positive updates
Company Guidance
The company reiterated 2026 guidance calling for adjusted free cash flow of $910–$960 million (about a 20% increase year‑over‑year at the midpoint) and excess adjusted free cash flow of roughly $280 million after fully funding a targeted 5% distribution increase, with full‑year net income of $650–$700 million and adjusted EBITDA of $1.225–$1.275 billion (roughly flat at the midpoint vs. 2025). Quarterly targets include Q2 results of net income $174 million, adjusted EBITDA $314 million and adjusted FCF ≈$232 million (Q2 capex ≈$31 million, net interest ≈$51 million, $256 million drawn on the revolver), Q2 throughput of ~433 MMcf/d gas, 117,000 bbl/d crude and 121,000 bbl/d water, and Q3 guidance of net income $165–$175 million and adjusted EBITDA $310–$320 million (expected flat at the midpoint vs. Q2) with higher Q3 capex and lower Q3 adjusted FCF; management expects second‑half volumes to grow (roughly ≥5% quarter‑on‑quarter into the second half) and to reduce leverage from ~3x toward about 2.5x by 2028.Hess Midstream Partners Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
46
Neutral
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.61B | 1.62B | 1.49B | 1.35B | 1.27B | 1.20B |
| Gross Profit | 1.30B | 1.40B | 1.29B | 1.15B | 1.09B | 1.04B |
| EBITDA | 1.23B | 1.24B | 1.14B | 1.02B | 977.80M | 903.40M |
| Net Income | 375.00M | 352.90M | 223.10M | 118.60M | 83.90M | 46.40M |
Balance Sheet | ||||||
| Total Assets | 4.26B | 4.39B | 4.15B | 3.79B | 3.59B | 3.49B |
| Cash, Cash Equivalents and Short-Term Investments | 5.00M | 1.90M | 4.30M | 5.40M | 3.10M | 2.20M |
| Total Debt | 3.68B | 3.77B | 3.47B | 3.21B | 2.89B | 2.56B |
| Total Liabilities | 3.87B | 3.95B | 3.69B | 3.43B | 3.06B | 2.73B |
| Stockholders Equity | 514.60M | 568.30M | 530.70M | 340.20M | 245.10M | 204.10M |
Cash Flow | ||||||
| Free Cash Flow | 694.40M | 728.20M | 634.20M | 642.90M | 622.90M | 632.30M |
| Operating Cash Flow | 1.04B | 983.80M | 940.30M | 866.40M | 861.10M | 795.50M |
| Investing Cash Flow | -198.60M | -255.60M | -306.10M | -223.50M | -238.20M | -163.20M |
| Financing Cash Flow | -837.30M | -730.60M | -635.30M | -640.60M | -622.00M | -632.70M |
Hess Midstream Partners Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $19.58B | 14.99 | 34.12% | 7.71% | 18.00% | -2.36% | |
75 Outperform | $8.37B | 13.98 | 69.02% | 7.47% | 2.78% | 7.61% | |
74 Outperform | $16.41B | 6.44 | 27.46% | 6.48% | 9.00% | 299.23% | |
74 Outperform | $10.41B | 26.12 | 20.19% | 3.96% | 7.19% | -11.58% | |
70 Outperform | $13.69B | 29.17 | 9.87% | 2.33% | 18.12% | 22.38% | |
66 Neutral | $8.05B | 18.32 | -23.32% | 6.37% | 10.46% | 281.46% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
HESM
Hess Midstream Partners
40.54
2.12
5.51%
PAA
Plains All American
23.15
6.84
41.91%
WES
Western Midstream Partners
48.12
13.16
37.64%
AM
Antero Midstream
22.10
4.65
26.63%
KNTK
Kinetik
51.11
12.09
30.98%
DTM
DT Midstream
134.78
34.17
33.97%
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.