Hess Midstream Q4 2025 Earnings Call Insights
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6d ago
0mins
Should l Buy HESM?
Source: seekingalpha
- Significant Capital Reduction: Hess Midstream anticipates a 40% decrease in capital spending for 2026 to approximately $150 million, with further reductions expected to below $75 million annually in 2027 and 2028, which will enhance financial flexibility and support future shareholder returns.
- Stable Revenue Outlook: The company projects net income for 2026 to be between $650 million and $700 million, with adjusted EBITDA expected between $1.225 billion and $1.275 billion, indicating stable revenue underpinned by minimum volume commitments, thereby boosting investor confidence.
- Free Cash Flow Growth: Adjusted free cash flow is expected to reach between $850 million and $900 million in 2026, reflecting a 12% growth over 2025, with plans to allocate part of this cash flow towards debt repayment and shareholder returns, further solidifying the company's financial health.
- Weather Impact and Risk Management: Despite revenue declines in the fourth quarter due to severe winter weather, management emphasized that 95% of revenues are protected by minimum volume commitments, demonstrating the company's resilience in managing short-term risks while ensuring long-term growth sustainability.
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Analyst Views on HESM
Wall Street analysts forecast HESM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for HESM is 36.50 USD with a low forecast of 34.00 USD and a high forecast of 39.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
0 Buy
3 Hold
0 Sell
Hold
Current: 34.920
Low
34.00
Averages
36.50
High
39.00
Current: 34.920
Low
34.00
Averages
36.50
High
39.00
About HESM
Hess Midstream LP is a midstream company that owns, operates, develops and acquires a diverse set of midstream assets to provide services to the Company and third-party customers. It owns oil, gas and produces water handling assets that are located in the Bakken and Three Forks Shale plays in the Williston Basin area of North Dakota. Its gathering segment includes Hess North Dakota Pipeline Operations LP and Hess Water Services Holdings LLC, which owns natural gas gathering and compression, crude oil gathering, and produced water gathering and disposal. Its processing and storage segment includes Hess TGP Operations LP and Hess Mentor Storage Holdings LLC, which owns Tioga gas plant, an equity investment in LM4 Joint Venture, and mentor storage terminal. Its terminaling and export segment includes Hess North Dakota Export Logistics Operations LP, which owns Ramberg Terminal Facility, Tioga Rail Terminal, Crude Oil Rail Cars, Johnson's Corner Header System, and other DAPL connections.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
S&P 500 Near All-Time High, Yet Bargain Investments Exist
- High-Yield Stock Picks: Hess Midstream Partners (HESM) and Simon Property Group (SPG) are highlighted as attractive high-yield stocks, with dividend yields of 0.43% and 1.62% respectively, indicating stable cash flows and investment appeal.
- Market Opportunity Analysis: Despite the S&P 500 nearing its all-time high, investors can still find value in high-yield stocks, particularly during market volatility, as these stocks offer a relatively safe investment option that can mitigate downside risks.
- Investor Focus: The video emphasizes the potential attractiveness of these two stocks, especially in the current economic climate where investors seek stable income sources to navigate uncertainties, with Hess and Simon's dividend policies providing a solid solution.
- Future Outlook: As market fluctuations continue, the high dividend yields of Hess and Simon may attract more income-seeking investors, potentially driving their stock prices higher and further enhancing their strategic positions within investment portfolios.
See More
Hess Midstream Q4 2025 Earnings Call Insights
- Significant Capital Reduction: Hess Midstream anticipates a 40% decrease in capital spending for 2026 to approximately $150 million, with further reductions expected to below $75 million annually in 2027 and 2028, which will enhance financial flexibility and support future shareholder returns.
- Stable Revenue Outlook: The company projects net income for 2026 to be between $650 million and $700 million, with adjusted EBITDA expected between $1.225 billion and $1.275 billion, indicating stable revenue underpinned by minimum volume commitments, thereby boosting investor confidence.
- Free Cash Flow Growth: Adjusted free cash flow is expected to reach between $850 million and $900 million in 2026, reflecting a 12% growth over 2025, with plans to allocate part of this cash flow towards debt repayment and shareholder returns, further solidifying the company's financial health.
- Weather Impact and Risk Management: Despite revenue declines in the fourth quarter due to severe winter weather, management emphasized that 95% of revenues are protected by minimum volume commitments, demonstrating the company's resilience in managing short-term risks while ensuring long-term growth sustainability.
See More
Hess Midstream Reports Q4 2025 Financial Highlights
- Net Income Performance: Hess Midstream reported net income of $168 million for Q4 2025, a slight decrease from $172.1 million in Q4 2024, indicating challenges in profitability due to severe winter weather impacts.
- Cash Flow and EBITDA: The company generated $245.6 million in net cash from operating activities and reported Adjusted EBITDA of $309.1 million, demonstrating effective cost control and cash flow maintenance despite revenue fluctuations.
- Capital Expenditure Reduction: Capital expenditures for Q4 2025 totaled $47.6 million, a 44% decrease from $84.3 million in the prior year, reflecting a strategic focus on reducing capital spending following the completion of infrastructure projects to enhance free cash flow.
- Quarterly Cash Distribution Increase: The Board declared a quarterly cash distribution of $0.7641 per share for Q4 2025, an increase of $0.0093 from Q3, underscoring the company's ongoing commitment to shareholder returns despite overall revenue volatility.
See More
Hess Midstream Partners Q4 Earnings Beat Expectations
- Earnings Beat: Hess Midstream Partners reported a Q4 GAAP EPS of $0.72, exceeding expectations by $0.06, indicating stable profitability and enhanced market confidence.
- Revenue Miss: The company generated $404.2 million in revenue, a 2.1% year-over-year increase, yet fell short of expectations by $12.24 million, reflecting challenges in the market environment and increased competition.
- Increased Cash Distribution: The quarterly cash distribution was raised to $0.7641 per Class A share for Q4, an increase of $0.0093 from Q3, demonstrating the company's ongoing commitment to shareholder returns, which may attract more investor interest.
- Solid Fundamentals: Despite no growth in adjusted EBITDA, Hess Midstream showcases solid fundamentals and low valuation, potentially supporting future stock price appreciation, although investors should remain cautious of inherent risks.
See More
Hess Midstream Partners Q4 Earnings Preview and Analysis
- Earnings Announcement Date: Hess Midstream Partners is set to announce its Q4 earnings on February 2 before market open, with consensus EPS estimate at $0.72 and revenue forecasted at $416.44 million, reflecting a 5.2% year-over-year growth.
- Earnings Estimate Changes: Over the past three months, EPS estimates have seen no upward revisions and seven downward adjustments, while revenue estimates experienced one upward revision and three downward revisions, indicating a cautious market sentiment regarding the company's profitability.
- Dividend Appeal: The 8.8% dividend offered by Hess Midstream has drawn investor interest, although analysts caution about potential risks, particularly as the company pivots its capital spending plan to target a 5% annual distribution growth through 2027.
- Financial Performance: Hess Midstream recently reported a GAAP EPS of $0.75, beating estimates by $0.06, and revenue of $420.9 million, exceeding expectations by $2.98 million, demonstrating the company's resilience in the current market environment.
See More
Energy Midstream Firms Show Significant Dividend Growth
- Delek Logistics Dividend Increase: Delek Logistics Partners declared a quarterly distribution of $1.125 per unit, a 0.4% increase from the previous quarter, extending its distribution growth streak to 52 consecutive quarters with a current yield of 9%, reflecting stable cash flows and financial flexibility.
- Hess Midstream Steady Growth: Hess Midstream's quarterly cash distribution is $0.7641 per share, a 1.2% increase from the prior quarter, with a cumulative dividend growth of 65% since 2021, and an expected annual increase of at least 5% through 2028, ensuring predictable cash flows.
- Plains All American Dividend Boost: Plains All American Pipeline announced a quarterly distribution of $0.4175 per unit, a 10% increase from its prior level, with a compound annual growth rate of 21% over the last four years, currently yielding 8.5%, demonstrating financial flexibility and ongoing investment capacity.
- High Yields Attract Investors: With yields between 8% and 9%, Delek Logistics, Hess Midstream, and Plains All American Pipeline regularly increase their payouts, making them appealing options for investors seeking stable passive income streams.
See More
S&P 500 Near All-Time High, Yet Bargain Investments Exist
- High-Yield Stock Picks: Hess Midstream Partners (HESM) and Simon Property Group (SPG) are highlighted as attractive high-yield stocks, with dividend yields of 0.43% and 1.62% respectively, indicating stable cash flows and investment appeal.
- Market Opportunity Analysis: Despite the S&P 500 nearing its all-time high, investors can still find value in high-yield stocks, particularly during market volatility, as these stocks offer a relatively safe investment option that can mitigate downside risks.
- Investor Focus: The video emphasizes the potential attractiveness of these two stocks, especially in the current economic climate where investors seek stable income sources to navigate uncertainties, with Hess and Simon's dividend policies providing a solid solution.
- Future Outlook: As market fluctuations continue, the high dividend yields of Hess and Simon may attract more income-seeking investors, potentially driving their stock prices higher and further enhancing their strategic positions within investment portfolios.
See More
Hess Midstream Q4 2025 Earnings Call Insights
- Significant Capital Reduction: Hess Midstream anticipates a 40% decrease in capital spending for 2026 to approximately $150 million, with further reductions expected to below $75 million annually in 2027 and 2028, which will enhance financial flexibility and support future shareholder returns.
- Stable Revenue Outlook: The company projects net income for 2026 to be between $650 million and $700 million, with adjusted EBITDA expected between $1.225 billion and $1.275 billion, indicating stable revenue underpinned by minimum volume commitments, thereby boosting investor confidence.
- Free Cash Flow Growth: Adjusted free cash flow is expected to reach between $850 million and $900 million in 2026, reflecting a 12% growth over 2025, with plans to allocate part of this cash flow towards debt repayment and shareholder returns, further solidifying the company's financial health.
- Weather Impact and Risk Management: Despite revenue declines in the fourth quarter due to severe winter weather, management emphasized that 95% of revenues are protected by minimum volume commitments, demonstrating the company's resilience in managing short-term risks while ensuring long-term growth sustainability.
See More
Hess Midstream Reports Q4 2025 Financial Highlights
- Net Income Performance: Hess Midstream reported net income of $168 million for Q4 2025, a slight decrease from $172.1 million in Q4 2024, indicating challenges in profitability due to severe winter weather impacts.
- Cash Flow and EBITDA: The company generated $245.6 million in net cash from operating activities and reported Adjusted EBITDA of $309.1 million, demonstrating effective cost control and cash flow maintenance despite revenue fluctuations.
- Capital Expenditure Reduction: Capital expenditures for Q4 2025 totaled $47.6 million, a 44% decrease from $84.3 million in the prior year, reflecting a strategic focus on reducing capital spending following the completion of infrastructure projects to enhance free cash flow.
- Quarterly Cash Distribution Increase: The Board declared a quarterly cash distribution of $0.7641 per share for Q4 2025, an increase of $0.0093 from Q3, underscoring the company's ongoing commitment to shareholder returns despite overall revenue volatility.
See More
Hess Midstream Partners Q4 Earnings Beat Expectations
- Earnings Beat: Hess Midstream Partners reported a Q4 GAAP EPS of $0.72, exceeding expectations by $0.06, indicating stable profitability and enhanced market confidence.
- Revenue Miss: The company generated $404.2 million in revenue, a 2.1% year-over-year increase, yet fell short of expectations by $12.24 million, reflecting challenges in the market environment and increased competition.
- Increased Cash Distribution: The quarterly cash distribution was raised to $0.7641 per Class A share for Q4, an increase of $0.0093 from Q3, demonstrating the company's ongoing commitment to shareholder returns, which may attract more investor interest.
- Solid Fundamentals: Despite no growth in adjusted EBITDA, Hess Midstream showcases solid fundamentals and low valuation, potentially supporting future stock price appreciation, although investors should remain cautious of inherent risks.
See More
Hess Midstream Partners Q4 Earnings Preview and Analysis
- Earnings Announcement Date: Hess Midstream Partners is set to announce its Q4 earnings on February 2 before market open, with consensus EPS estimate at $0.72 and revenue forecasted at $416.44 million, reflecting a 5.2% year-over-year growth.
- Earnings Estimate Changes: Over the past three months, EPS estimates have seen no upward revisions and seven downward adjustments, while revenue estimates experienced one upward revision and three downward revisions, indicating a cautious market sentiment regarding the company's profitability.
- Dividend Appeal: The 8.8% dividend offered by Hess Midstream has drawn investor interest, although analysts caution about potential risks, particularly as the company pivots its capital spending plan to target a 5% annual distribution growth through 2027.
- Financial Performance: Hess Midstream recently reported a GAAP EPS of $0.75, beating estimates by $0.06, and revenue of $420.9 million, exceeding expectations by $2.98 million, demonstrating the company's resilience in the current market environment.
See More
Energy Midstream Firms Show Significant Dividend Growth
- Delek Logistics Dividend Increase: Delek Logistics Partners declared a quarterly distribution of $1.125 per unit, a 0.4% increase from the previous quarter, extending its distribution growth streak to 52 consecutive quarters with a current yield of 9%, reflecting stable cash flows and financial flexibility.
- Hess Midstream Steady Growth: Hess Midstream's quarterly cash distribution is $0.7641 per share, a 1.2% increase from the prior quarter, with a cumulative dividend growth of 65% since 2021, and an expected annual increase of at least 5% through 2028, ensuring predictable cash flows.
- Plains All American Dividend Boost: Plains All American Pipeline announced a quarterly distribution of $0.4175 per unit, a 10% increase from its prior level, with a compound annual growth rate of 21% over the last four years, currently yielding 8.5%, demonstrating financial flexibility and ongoing investment capacity.
- High Yields Attract Investors: With yields between 8% and 9%, Delek Logistics, Hess Midstream, and Plains All American Pipeline regularly increase their payouts, making them appealing options for investors seeking stable passive income streams.
See More
