Hess Midstream Partners (HESM) AI Stock Analysis

• Market Cap: $8.29B
• Dividend Yield: 6.86%
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.58
• Revenue Growth: 8.77%
• EPS Growth: 15.22%
• Country: US
• Employees: 176
• Sector: Energy
• Sector Strength: 48
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.65
• Shares Outstanding: 116,511,080
• 10 Day Avg. Volume: 1,715,436
• 30 Day Avg. Volume: 1,518,192
• PEG Ratio: 7.12
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.33
• Enterprise Value/Market Cap: 1.43
• Enterprise Value/Revenue: 6.58
• Enterprise Value/Gross Profit: 37.39
• Enterprise Value/Ebitda: 12.69
• 1Y Price Target: $45.50
• Price Target Upside: 12.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 75 Outperform
• Price Target: $43.00 ▲(6.75%Upside)

Hess Midstream Partners scores well due to its strong financial performance, attractive valuation, and positive earnings call outlook. The recent stock buyback plan further supports shareholder value. However, technical analysis indicates a neutral momentum and high debt levels are a concern.

Positive Factors

Earnings and Returns

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

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.

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

Market Risks

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 midstream energy company primarily engaged in processing, storing, and transporting natural gas, crude oil, and natural gas liquids (NGLs) in the United States. As a key player in the midstream sector, HESM offers essential infrastructure and logistical support to its customers, facilitating the efficient movement of energy commodities from production sites to end-users and markets. The company operates a network of strategically located assets, including pipelines, terminals, and processing facilities, to support its integrated operations.

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 demonstrates strong profitability with high margins and positive revenue growth. Cash flow management is robust, though free cash flow growth fluctuations and high debt levels pose risks.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.50B	1.35B	1.28B	1.20B	1.09B
Gross Profit	1.29B	1.04B	1.09B	1.04B	935.00M
EBITDA	1.14B	1.02B	972.50M	903.40M	733.40M
Net Income	223.10M	118.60M	620.60M	617.80M	484.80M
Balance Sheet
Total Assets	4.15B	3.79B	3.59B	3.49B	3.37B
Cash, Cash Equivalents and Short-Term Investments	4.30M	5.40M	3.10M	2.20M	2.60M
Total Debt	3.47B	3.21B	2.89B	2.56B	1.91B
Total Liabilities	3.69B	3.43B	3.06B	2.73B	2.05B
Stockholders Equity	465.30M	340.20M	529.00M	753.10M	1.33B
Cash Flow
Free Cash Flow	634.20M	642.90M	622.90M	632.30M	340.60M
Operating Cash Flow	940.30M	866.40M	861.10M	795.50M	641.70M
Investing Cash Flow	-306.10M	-223.50M	-238.20M	-163.20M	-301.00M
Financing Cash Flow	-635.30M	-640.60M	-622.00M	-632.70M	-341.40M

Hess Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 40.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 40.28 is above the 20-day moving average (MA) of 38.71, above the 50-day MA of 38.55, and above the 200-day MA of 37.47, indicating a bullish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 59.97 is Neutral, neither overbought nor oversold. The STOCH value of 52.25 is Neutral, 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
WES	79 Outperform	$15.50B	12.16	39.79%	8.67%	11.48%	-5.67%
AM	78 Outperform	$8.19B	19.87	19.71%	5.27%	5.03%	7.15%
HESM	75 Outperform	$8.29B	15.52	49.74%	6.86%	8.77%	15.22%
DTM	74 Outperform	$10.23B	27.54	8.29%	3.11%	10.83%	-10.47%
KNTK	58 Neutral	$6.81B	45.95	-8.21%	7.58%	23.42%	-61.22%
Sector *	57 Neutral	HK$89.00B	3.58	-2.25%	2.98%	-4.44%	-41.07%
SMC	50 Neutral	$481.71M	5.86	-28.13%	―	-4.69%	-418.50%

Hess Midstream Partners Corporate Events

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.

The most recent analyst rating on (HESM) stock is a Buy with a $42.00 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 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.