Western Midstream Partners (WES) AI Stock Analysis

• Market Cap: $14.51B
• Dividend Yield: 9.38%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.50
• Revenue Growth: 7.11%
• EPS Growth: -16.14%
• Country: US
• Employees: 1,511
• Sector: Energy
• Sector Strength: 58
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.87
• Shares Outstanding: 381,328,600
• 10 Day Avg. Volume: 1,084,099
• 30 Day Avg. Volume: 1,316,058
• 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: 1.50
• Enterprise Value/Revenue: 5.94
• Enterprise Value/Gross Profit: 7.88
• Enterprise Value/Ebitda: 10.00
• 1Y Price Target: $41.14
• Price Target Upside: 8.15% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 77 Outperform
• Price Target: $43.00 ▲(13.04% Upside)

Western Midstream Partners receives a strong overall score driven by robust financial performance and positive earnings call highlights. The strategic acquisition and operational achievements enhance growth prospects. While technical indicators are neutral, the attractive dividend yield and fair valuation further support the stock's appeal.

Positive Factors

Capital Management

Management has simplified the capital allocation framework by retiring its enhanced distribution feature, which aligns with the current growth-oriented backdrop.

Financial Performance

The free cash flow after dividends showed a significant increase from expected estimates, reflecting strong cash management.

Growth Initiatives

Western Midstream Partners has announced the construction of the 'Pathfinder' pipeline, which aims to enhance its water handling and disposal capabilities, aligning with investor interest in growth.

Negative Factors

Capital Expenditure

WES' FY25 capex outlook of $625-775mn was higher than expected, and the partnership expects FY26 capex to be even higher.

Production Challenges

Crude oil and NGL throughput experienced a notable decline compared to both the consensus and the previous year, indicating challenges in this area.

Segment Performance

Produced water adjusted gross margin fell short of expectations compared to the previous quarter and consensus estimates, suggesting potential issues in this segment.

Western Midstream Partners Business Overview & Revenue Model

Company Description

Western Midstream Partners, LP, a midstream energy company, together with its subsidiaries, acquires, owns, develops, and operates primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. It also buys and sells natural gas, NGLs, and condensate. The company operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.

How the Company Makes Money

Western Midstream Partners generates revenue primarily through fee-based contracts for its midstream services, which include gathering, processing, transportation, and storage of natural gas, crude oil, and NGLs. The company's revenue model is largely based on long-term contracts with producers, which provides stable cash flows. Key revenue streams include fees from gathering systems, processing plants, and transportation pipelines. Additionally, Western Midstream has established significant partnerships with major oil and gas producers, enhancing its operational capacity and market reach. Factors contributing to its earnings include the volume of hydrocarbons processed and transported, market demand for energy, and the efficiency of its operations.

Western Midstream Partners Financial Statement Overview

Summary

Western Midstream Partners exhibits strong financial health with robust profitability and efficient cash flow management. Despite high leverage, the company effectively utilizes its equity to generate returns. Continued revenue growth and cash flow strength position the company well, though attention to cost management is advisable.

Income Statement

Western Midstream Partners demonstrates strong profitability with a high gross profit margin of 75.4% and a solid net profit margin of 34.7% for the TTM. The company has shown consistent revenue growth, with a 1.01% increase in the latest period. However, there is a slight decline in EBIT and EBITDA margins compared to the previous year, indicating potential cost pressures.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio of 2.19, which is typical for the industry but indicates significant leverage. Return on equity is strong at 39.6%, reflecting efficient use of equity. The equity ratio is moderate, suggesting a balanced asset structure.

Cash Flow

Western Midstream Partners has a healthy operating cash flow to net income ratio of 3.10, indicating strong cash generation relative to earnings. Free cash flow growth is positive at 9.64%, and the free cash flow to net income ratio is robust at 73.5%, highlighting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.67B	3.61B	3.11B	3.25B	2.88B	2.77B
Gross Profit	2.77B	2.78B	2.18B	2.25B	2.00B	2.09B
EBITDA	2.18B	2.66B	2.00B	2.17B	1.71B	1.78B
Net Income	1.27B	1.57B	998.53M	1.22B	916.29M	527.01M
Balance Sheet
Total Assets	12.16B	13.14B	12.47B	11.27B	11.27B	11.83B
Cash, Cash Equivalents and Short-Term Investments	129.73M	1.09B	272.79M	286.66M	202.00M	444.92M
Total Debt	7.00B	8.14B	7.96B	6.83B	6.95B	7.89B
Total Liabilities	8.83B	9.77B	9.44B	8.16B	8.18B	8.93B
Stockholders Equity	3.19B	3.24B	2.90B	2.97B	2.96B	2.76B
Cash Flow
Free Cash Flow	1.58B	1.27B	926.25M	1.21B	1.45B	1.21B
Operating Cash Flow	2.15B	2.11B	1.66B	1.70B	1.77B	1.64B
Investing Cash Flow	-735.79M	-39.17M	-1.61B	-218.24M	-257.54M	-448.25M
Financing Cash Flow	-1.63B	-1.25B	-67.91M	-1.40B	-1.75B	-844.20M

Western Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 38.04
• 50DMA: Negative
• 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 WES, the sentiment is Negative. The current price of 38.04 is below the 20-day moving average (MA) of 38.36, below the 50-day MA of 38.73, and above the 200-day MA of 37.77, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 44.22 is Neutral, neither overbought nor oversold. The STOCH value of 31.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WES.

Western Midstream Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HESM	80 Outperform	$8.56B	15.13	52.91%	6.95%	9.02%	17.28%
AM	78 Outperform	$8.73B	19.41	21.65%	4.93%	7.09%	17.53%
WES	77 Outperform	$14.51B	11.71	38.42%	9.38%	7.11%	-16.14%
DTM	69 Neutral	$10.69B	28.30	8.48%	2.95%	15.28%	-9.99%
PAA	68 Neutral	$12.11B	19.04	8.34%	8.46%	-4.31%	-17.80%
Sector *	65 Neutral	$15.01B	7.39	3.39%	5.33%	4.10%	-61.80%
PAGP	62 Neutral	$13.99B	26.80	8.16%	7.91%	-4.31%	-16.62%

Western Midstream Partners Corporate Events

Western Midstream Partners Announces Merger with Aris Water

On August 6, 2025, Western Midstream Partners announced a merger agreement with Aris Water Solutions, marking a strategic move to enhance its position as a leading midstream water services provider in the Delaware Basin. The transaction, valued at approximately $2 billion, is expected to close in the fourth quarter of 2025 and aims to achieve $40 million in annualized cost synergies. The merger will expand WES’s capabilities in natural-gas, crude-oil, and produced-water businesses, further solidifying its market presence in West Texas and New Mexico. The board of directors of both companies have approved the merger, which is subject to customary closing conditions, including shareholder approval and regulatory clearances.