Western Midstream Partners (WES) AI Stock Analysis

• Market Cap: $14.81B
• Dividend Yield: 9.37%
• Average Volume (3M): 961.30K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.53
• Revenue Growth: 11.48%
• EPS Growth: -5.67%
• Country: US
• Employees: 1,511
• Sector: Energy
• Sector Strength: 72
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.79
• Shares Outstanding: 381,327,360
• 10 Day Avg. Volume: 873,702
• 30 Day Avg. Volume: 961,301
• PEG Ratio: 0.23
• Price to Book (P/B): 3.41
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.73
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 1.20
• Enterprise Value/Gross Profit: 6.80
• Enterprise Value/Ebitda: 1.96
• 1Y Price Target: $40.57
• Price Target Upside: 4.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 78 Outperform
• Price Target: $44.00 ▲(13.31%Upside)

Western Midstream Partners benefits from strong financial performance and attractive valuation metrics, making it a compelling investment. While technical indicators are mixed, the company's strategic initiatives and robust dividend yield enhance its investment appeal.

Positive Factors

Cash Flow Management

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

Financial Leverage

The net debt to EBITDA ratio improved compared to the previous year, indicating better financial leverage.

Growth Initiatives

WES announced the FID of 'Pathfinder pipeline' and an expansion of its produced water gathering and disposal system, which are underpinned by a long-term agreement with significant operating leverage.

Negative Factors

Capex Spending

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

Crude Oil and NGL Throughput

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

Produced Water Segment

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 (WES) is a leading midstream energy company based in the United States. It focuses on gathering, processing, and transporting natural gas, natural gas liquids (NGLs), crude oil, and produced water. The company operates primarily in the prolific resource regions of the Delaware Basin and DJ Basin, offering essential services that support upstream oil and gas operations. Western Midstream Partners is known for its strategic infrastructure assets that facilitate the efficient movement of energy products from production sites to end markets.

How the Company Makes Money

Western Midstream Partners generates revenue through a fee-based business model, primarily earning money from gathering, processing, and transporting hydrocarbons. The company charges producers for moving natural gas, NGLs, crude oil, and produced water through its extensive network of pipelines and facilities. Key revenue streams include gathering and processing fees, transportation fees, and service agreements that often include minimum volume commitments, ensuring stable cash flows. Additionally, Western Midstream Partners benefits from strategic partnerships and long-term contracts with major oil and gas producers, providing a steady and predictable source of income. The company also engages in ancillary services, such as marketing and selling of natural gas and NGLs, which contribute to its overall earnings.

Western Midstream Partners Financial Statement Overview

Summary

Western Midstream Partners exhibits strong profitability with impressive margins and robust cash flow generation. Despite high debt levels, the company manages its equity efficiently to generate strong returns.

Income Statement

Western Midstream Partners demonstrates strong profitability with a gross profit margin of 69.2% and a net profit margin of 36% for TTM. The EBIT margin stands at 44.5%, and the EBITDA margin is impressive at 58%. Revenue growth is moderate at 0.82% TTM, indicating stable performance in a competitive industry.

Balance Sheet

The company maintains a healthy equity ratio of 25.6%, though the debt-to-equity ratio is elevated at 2.3, indicating reliance on debt financing. Return on equity is robust at 41.1% TTM, showcasing efficient use of equity to generate profits.

Cash Flow

Free cash flow growth is strong at 13.2% TTM, with a solid operating cash flow to net income ratio of 1.7, highlighting effective cash generation. The free cash flow to net income ratio of 1.1 further reflects sound cash flow management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.63B	3.61B	3.11B	3.25B	2.88B	2.77B
	Gross Profit
2.52B	2.78B	2.18B	2.25B	2.00B	2.09B
	EBIT
1.62B	1.97B	1.38B	1.59B	1.34B	1.53B
	EBITDA
2.11B	2.66B	2.00B	2.17B	1.71B	1.78B
	Net Income Common Stockholders
1.31B	1.57B	998.53M	1.22B	916.29M	527.01M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
448.45M	1.09B	272.79M	286.66M	202.00M	444.92M
	Total Assets
12.46B	13.14B	12.47B	11.27B	11.27B	11.83B
	Total Debt
7.33B	8.14B	7.96B	6.79B	6.40B	7.42B
	Net Debt
6.89B	7.05B	7.69B	6.50B	6.20B	6.97B
	Total Liabilities
9.12B	9.77B	9.44B	8.16B	8.18B	8.93B
	Stockholders Equity
3.18B	3.24B	2.90B	3.11B	3.10B	2.90B
Cash Flow		Free Cash Flow
1.44B	1.27B	926.25M	1.21B	1.45B	1.21B
	Operating Cash Flow
2.23B	2.11B	1.66B	1.70B	1.77B	1.64B
	Investing Cash Flow
-582.08M	-39.17M	-1.61B	-218.24M	-257.54M	-448.25M
	Financing Cash Flow
-1.49B	-1.25B	-67.91M	-1.40B	-1.75B	-844.20M

Western Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 38.83
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WES, the sentiment is Positive. The current price of 38.83 is above the 20-day moving average (MA) of 38.35, above the 50-day MA of 37.86, and above the 200-day MA of 38.41, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 55.11 is Neutral, neither overbought nor oversold. The STOCH value of 89.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$8.31B	15.56	49.74%	7.17%	8.77%	15.22%
DTM	79 Outperform	$10.80B	29.07	8.29%	3.08%	10.83%	-10.47%
WES	78 Outperform	$14.81B	11.61	39.79%	9.37%	11.48%	-5.67%
AM	78 Outperform	$8.76B	21.26	19.71%	4.92%	5.03%	7.15%
PAA	68 Neutral	$12.69B	19.42	9.43%	8.42%	3.40%	-20.48%
PAGP	66 Neutral	$14.59B	26.16	10.09%	7.92%	3.40%	-15.90%
Sector *	58 Neutral	$7.56B	3.50	-4.45%	10.15%	0.79%	-49.51%

Western Midstream Partners Corporate Events

Western Midstream Partners Announces Leadership Transition

On February 18, 2025, Robert W. Bourne, Senior Vice President and Chief Commercial Officer of Western Midstream Holdings, LLC, entered into a Retirement Agreement with Western Midstream Partners, LP, under which he will transition to an advisory role until March 3, 2025, and then serve as a consultant for six months. The agreement outlines various retirement benefits, including pro rata bonuses, equity vesting, and participation in benefit plans, along with confidentiality and non-compete clauses, potentially impacting stakeholder interests and company operations.