Hess Midstream (HESM) is back in focus after Chevron agreed to transfer its ownership interests and DJ Basin midstream assets in exchange for revised Bakken contracts and a US$200 million cash payment.
The Hess Midstream share price has come under pressure since the Chevron announcement, with a 1-day share price return of down 14.63% and a 30-day share price return of down 17.24%, as investors react to the revised earnings guidance and ownership changes. Despite that short term drop, total shareholder return of 7.51% over 1 year and 84.22% over 5 years points to longer term holders still being ahead, although recent momentum is clearly fading for now.
Scan beyond Hess Midstream and compare this selloff with hand-picked midstream and infrastructure operators by reviewing the 43 power grid technology and infrastructure stocks that could be setting up for the next move.
Bulls see Hess Midstream transforming into a higher quality, independent operator, while bears focus on reduced guidance and tariff cuts. Which story does the current valuation actually support?
Most Popular Narrative: 12% Undervalued
On the most followed narrative, Hess Midstream screens as undervalued, with a fair value of $37.50 against a last close of $33.03. This puts the recent selloff squarely at the center of the debate over what its cash flows are worth.
Hess Midstream is moving into a capital lighter phase as total capital expenditures are expected to fall from about US$270 million in 2025 to approximately US$150 million in 2026 and then to less than US$75 million per year in 2027 and 2028. This supports higher adjusted free cash flow and potentially stronger free cash flow based valuation multiples.
See why 40 investors see Hess Midstream as 12% undervalued.
Result: Fair Value of $37.50 (UNDERVALUED)
Still, the Hess Midstream story can wobble if Chevron reduces Bakken output sooner than expected or if minimum volume protection fades faster after 2028.
Find out about the key risks to this Hess Midstream narrative.
Next Steps
If the mixed sentiment on Hess Midstream leaves you unsure, now is the moment to review the data yourself and decide where you stand using the 4 key rewards and 2 important warning signs.
Looking for more Hess Midstream investment ideas?
If Hess Midstream has your attention after this shake-up, do not stop here. Widen your watchlist using focused screeners that surface clear, data driven ideas.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include HESM.
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
