Western Midstream Partners (WES) AI Stock Analysis

• Market Cap: $16.13B
• Dividend Yield: 9.13%
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.43
• Revenue Growth: 5.81%
• EPS Growth: -13.58%
• Country: US
• Employees: 1,511
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.47
• Shares Outstanding: 393,667,420
• 10 Day Avg. Volume: 1,785,642
• 30 Day Avg. Volume: 1,392,490
• PEG Ratio: -0.53
• Price to Book (P/B): 3.93
• Price to Sales (P/S): 4.12
• P/FCF Ratio: 10.80
• Enterprise Value/Market Cap: 1.54
• Enterprise Value/Revenue: 6.46
• Enterprise Value/Gross Profit: 9.44
• Enterprise Value/Ebitda: 10.78
• 1Y Price Target: $41.60
• Price Target Upside: 1.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 3.44
• Revenue Forecast (FY): $4.12B

• Rating: 74 Outperform
• Price Target: $49.00 ▲(19.57% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by strong underlying financial performance (high margins and solid operating cash generation) and an attractive valuation/income profile (moderate P/E with a high dividend yield). Technicals support an uptrend, but overbought momentum indicators and guidance for lower 2026 free cash flow versus 2025 temper the overall rating.

Positive Factors

Fee‑based contracts provide stable cash flows

Western’s fee-based revenue model and long-term contractual arrangements create predictable cash inflows that reduce commodity-price sensitivity, supporting durable distributable cash flow, predictable capex funding and the ability to service debt and invest in growth projects over multiple years.

Very high and sustainable margins

Consistently high gross and net margins reflect structural operating leverage and pricing power in midstream services. These margins give the company resilience against commodity swings, support strong free cash flow conversion and underpin long-term return on capital and distribution coverage.

Material deleveraging and stronger balance sheet

A sharp reduction in leverage materially improves financial flexibility: lowers refinancing risk, increases capacity for targeted growth spending and distributions, and enhances resilience to basin downturns or commodity shocks while preserving investment grade access to capital markets.

Negative Factors

Free cash flow decline and volatility

A materially lower FCF midpoint for 2026 versus 2025 reduces the near-term cash cushion and constrains discretionary options. Persistent FCF volatility complicates multi-year planning for distributions, deleveraging and execution of expansion projects despite strong underlying EBITDA generation.

Basin-specific production declines

Significant expected declines in key basins directly reduce throughput-dependent revenue and utilization of existing assets. Prolonged basin softness can limit organic growth, pressure unit economics on projects tied to those areas, and require reallocation of capital to offset lost volumes.

Waha hub pricing-related curtailments

Regional price dislocations and third‑party curtailments at Waha create recurring operational interruptions and revenue uncertainty for assets serving the Delaware Basin. Until new egress alleviates constraints, throughput and margin volatility remain structural downside risks to cash generation.

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, which provide stable cash flows regardless of commodity price fluctuations. Key revenue streams include gathering and processing fees from natural gas and NGLs, transportation fees from crude oil pipelines, and storage fees. The company benefits from long-term contractual arrangements with various producers, ensuring a predictable revenue base. Additionally, WES may engage in joint ventures or partnerships with other energy companies, enhancing its operational capabilities and expanding its market reach, which further contributes to its earnings.

Western Midstream Partners Financial Statement Overview

Summary

Strong profitability (very high gross margins and consistently robust net margins) and dependable operating cash generation with solid free-cash-flow conversion. Offsetting this, earnings and free cash flow show notable year-to-year volatility, and the sharp 2025 leverage shift reduces comparability versus prior years.

Income Statement

Revenue has generally trended up from 2020–2025 with only a modest dip in 2023, and 2025 shows strong year-over-year growth. Profitability is a key strength: gross margins remain very high (~69%–77%) and net margins are consistently robust (~19%–44%), supporting strong earnings power. The main weakness is volatility in operating profit measures year to year (notably 2024 vs. 2025), which suggests earnings can swing based on items beyond steady volume growth.

Balance Sheet

The balance sheet looks meaningfully improved in 2025, with debt-to-equity dropping to ~0.11 versus ~2.3–2.9 in 2020–2024, indicating a large reduction in leverage or a structural change that strengthens financial flexibility. Equity and assets are sizable, and returns on equity have been strong (roughly ~19%–49% historically, ~28% in 2025). The key risk is that prior years carried heavy leverage, and the sharp 2025 shift makes year-to-year comparability less stable.

Cash Flow

Operating cash flow is consistently strong and has covered net income by more than 1x each year (about ~1.25x–1.88x), supporting earnings quality. Free cash flow conversion is solid (roughly ~55%–82% of net income historically; ~67% in 2025), enabling distributions and/or deleveraging. The main weakness is free cash flow volatility, including a decline in 2025 (negative growth), which reduces near-term cash cushion despite healthy operating inflows.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.84B	3.61B	3.11B	3.25B	2.88B
Gross Profit	2.63B	2.78B	2.34B	2.25B	2.00B
EBITDA	2.30B	2.64B	1.99B	2.16B	1.85B
Net Income	1.17B	1.57B	1.02B	1.22B	916.29M
Balance Sheet
Total Assets	15.00B	13.14B	12.47B	11.27B	11.27B
Cash, Cash Equivalents and Short-Term Investments	819.49M	1.09B	272.79M	286.66M	202.00M
Total Debt	8.93B	8.14B	7.96B	6.83B	6.95B
Total Liabilities	10.84B	9.77B	9.44B	8.16B	8.18B
Stockholders Equity	4.02B	3.24B	2.90B	2.97B	2.96B
Cash Flow
Free Cash Flow	1.46B	1.27B	913.12M	1.21B	1.45B
Operating Cash Flow	2.19B	2.11B	1.65B	1.70B	1.77B
Investing Cash Flow	-1.09B	-39.17M	-1.61B	-218.24M	-257.54M
Financing Cash Flow	-1.38B	-1.25B	-58.83M	-1.40B	-1.75B

Western Midstream Partners Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 40.98
• 50DMA: Positive
• 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 Neutral. The current price of 40.98 is below the 20-day moving average (MA) of 41.51, above the 50-day MA of 40.18, and above the 200-day MA of 37.69, indicating a neutral trend. The MACD of 0.40 indicates Positive momentum. The RSI at 48.30 is Neutral, neither overbought nor oversold. The STOCH value of 29.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WES.

Western Midstream Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAA	78 Outperform	$14.48B	12.36	12.03%	8.54%	-7.53%	9.74%
DTM	75 Outperform	$13.95B	31.88	9.42%	2.70%	20.39%	-3.85%
WES	74 Outperform	$16.13B	13.77	31.82%	9.13%	5.81%	-13.58%
AM	74 Outperform	$10.46B	25.85	20.22%	4.98%	8.70%	21.42%
HESM	73 Outperform	$7.91B	13.31	―	8.45%	10.78%	19.10%
PAGP	66 Neutral	$16.78B	19.73	8.61%	8.03%	-7.53%	11.27%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Western Midstream Partners Corporate Events

Western Midstream Amends Key Gas Agreements, Redeems Units

On January 16, 2026, Western Midstream subsidiary Delaware Basin Midstream LLC amended its Delaware Basin gas gathering agreement with Occidental Petroleum’s Anadarko E&P Onshore LLC, shifting from a cost-of-service to a fixed-fee structure, adding new minimum volume commitments through 2027, and revising acreage transfer terms, while also entering related natural gas gathering and processing arrangements with a ConocoPhillips subsidiary. In connection with these changes, Western Midstream agreed to redeem 15.3 million of its common units from Occidental on February 3, 2026—reducing Occidental’s ownership stake—and structured the reset of Delaware Basin natural gas fees and new fixed-fee contracts so that lower operating cash flows over time are expected to be largely offset by distribution savings and recognition of contract liability revenue through 2032, further diversifying revenues, reducing related-party exposure, and advancing Western Midstream’s transition toward a more transparent, standalone fixed-fee midstream model with leverage targeted around 3.0x Adjusted EBITDA in 2026.

The most recent analyst rating on (WES) stock is a Hold with a $39.00 price target. To see the full list of analyst forecasts on Western Midstream Partners stock, see the WES Stock Forecast page.

Western Midstream Partners Completes $1.2 Billion Senior Notes Offering

On December 4, 2025, Western Midstream Operating, LP completed a public offering of $1.2 billion in senior notes due in 2031 and 2035. The proceeds will be used to repay maturing notes, reduce commercial paper program debt, and fund general partnership purposes, including capital expenditures. This financial move is expected to strengthen the company’s financial position and support its strategic initiatives, such as the acquisition of Aris Water Solutions, Inc.

The most recent analyst rating on (WES) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Western Midstream Partners stock, see the WES Stock Forecast page.