Hess Midstream Partners (HESM) AI Stock Analysis

• Market Cap: $8.03B
• Dividend Yield: 7.43%
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.58
• Revenue Growth: 8.77%
• EPS Growth: 15.22%
• Country: US
• Employees: 176
• Sector: Energy
• Sector Strength: 54
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.65
• Shares Outstanding: 116,511,080
• 10 Day Avg. Volume: 1,875,758
• 30 Day Avg. Volume: 1,517,626
• PEG Ratio: -0.05
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.98
• Enterprise Value/Market Cap: 0.51
• Enterprise Value/Revenue: 0.70
• Enterprise Value/Gross Profit: 3.62
• Enterprise Value/Ebitda: 0.92
• 1Y Price Target: $41.00
• Price Target Upside: 7.30% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 77 Outperform
• Price Target: $43.00 ▲(12.54%Upside)

Hess Midstream's strong financial performance and positive corporate events, such as the repurchase plan, are the primary strengths. While technical indicators are mixed, the company's valuation is attractive due to its reasonable P/E ratio and high dividend yield.

Positive Factors

Free Cash Flow Growth

Management has a clear view of free cash flow growth through the end of the decade, driven by EBITDA growth and declining capital expenditure.

Stock Buybacks

There is an expectation of nearly $2.5 billion in stock buybacks over the next five years, representing more than 25% of the company's market cap.

Negative Factors

EBITDA Guidance

Q4 EBITDA guidance was a tad below Consensus.

Operational Expenses

Slightly lowering the 2024 EBITDA estimate to reflect the impact of wildfires and higher operational expenses.

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 through fee-based contracts for its midstream services, which include the gathering, processing, storage, and transportation of natural gas, crude oil, and NGLs. The company primarily serves Hess Corporation, its parent company, under long-term fee-based agreements, ensuring a steady and predictable revenue stream. Additionally, HESM collaborates with other third-party producers, leveraging its extensive infrastructure to provide reliable midstream solutions. This fee-based model helps protect Hess Midstream from direct commodity price exposure, as its earnings are more dependent on the volume of hydrocarbons transported rather than their market price. The company's strategic partnerships and focus on operational efficiency further enhance its financial performance and growth potential.

Hess Midstream Partners Financial Statement Overview

Summary

Hess Midstream Partners shows strong profitability with high margins and revenue growth. However, a concerning rising debt-to-equity ratio poses financial risk, balanced by consistent cash flow generation and strong return on equity.

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	1.50B	1.35B	1.28B	1.20B	1.09B
Gross Profit	1.14B	1.29B	1.04B	1.09B	1.04B	935.00M
EBITDA	1.15B	1.14B	1.02B	972.50M	903.40M	733.40M
Net Income	250.10M	223.10M	118.60M	620.60M	617.80M	484.80M
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	0.00	465.30M	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: Negative
• Last Price: 38.21
• 50DMA: Positive
• 100DMA: Negative
• 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 Negative. The current price of 38.21 is below the 20-day moving average (MA) of 38.64, above the 50-day MA of 38.07, and above the 200-day MA of 37.10, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 48.44 is Neutral, neither overbought nor oversold. The STOCH value of 38.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HESM.

Hess Midstream Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WES	79 Outperform	$14.85B	11.64	39.79%	9.35%	11.48%	-5.67%
DTM	79 Outperform	$10.76B	28.97	8.29%	3.10%	10.83%	-10.47%
AM	78 Outperform	$8.68B	21.07	19.71%	4.97%	5.03%	7.15%
HESM	77 Outperform	$8.03B	15.02	49.74%	7.43%	8.77%	15.22%
KNTK	62 Neutral	$6.93B	46.71	-8.21%	7.12%	23.42%	-61.22%
Sector *	44 Neutral	AU$1.39B	-6.73	-23.02%	6.50%	5.33%	-26.92%
SMC	41 Neutral	$474.58M	5.86	-28.13%	―	-4.69%	-418.50%

Hess Midstream Partners Corporate Events

Hess Midstream Partners Announces Secondary Share Offering

On May 28, 2025, Hess Midstream LP announced the pricing of a secondary public offering of 15,022,517 Class A shares at $37.25 per share, conducted by an affiliate of Global Infrastructure Partners. The offering, managed by J.P. Morgan and Citigroup, is expected to generate gross proceeds of $559.59 million for the selling shareholder, with the company itself not receiving any proceeds. The offering is anticipated to close on May 30, 2025, and includes customary conditions and indemnifications. Additionally, governance changes were announced with the resignation of three board members, who left without disagreements with the company.

The most recent analyst rating on (HESM) stock is a Hold with a $40.00 price target. To see the full list of analyst forecasts on Hess Midstream Partners stock, see the HESM Stock Forecast page.

Hess Midstream Announces Major Share Offering

On May 28, 2025, Hess Midstream LP announced the commencement of a public offering of 15,022,517 Class A shares by GIP II Blue Holding, L.P., an affiliate of Global Infrastructure Partners. This offering will result in GIP no longer holding ownership interests in Hess Midstream or its affiliates, with Hess Investments North Dakota LLC gaining full control. The board will see the resignation of GIP’s designated directors, and Hess will continue to control the company’s management. The offering will not alter existing commercial agreements or the partnership agreement with Hess.

The most recent analyst rating on (HESM) stock is a Hold with a $40.00 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 $200 Million Repurchase Plan

On May 5, 2025, Hess Midstream LP announced a $200 million repurchase agreement, including $190 million of Class B units from its sponsors and $10 million of Class A shares from the public. The repurchase, approved by the board and conflicts committee, aims to enhance shareholder returns and maintain financial flexibility. The transaction is expected to close on May 9, 2025, with funding from the company’s existing revolving credit facility.