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    A Fresh Look at Hess Midstream’s (HESM) Valuation After Lowered Guidance and Analyst Downgrade

    Simply Wall St·10/03/2025 12:19:44
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    Hess Midstream (NYSE:HESM) shares slipped following news that Chevron will reduce Bakken rig activity. This prompted the company to lower its earnings and production guidance for both the third quarter and the full year 2025.

    See our latest analysis for Hess Midstream.

    After a steady stretch this year, Hess Midstream’s share price has softened amid Chevron’s rig pullback and updated guidance. This reflects caution about earning momentum and future production potential. Despite the recent dip, its total shareholder return remains strong over the past five years, suggesting that long-term investors have still seen significant gains.

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    With guidance now reset and a major analyst downgrade pressuring sentiment, does Hess Midstream’s steep pullback hint at an undervalued opportunity, or is the market already factoring in weaker growth prospects for the years ahead?

    Most Popular Narrative: 22% Undervalued

    With the narrative’s fair value of $44.17 comfortably above Hess Midstream’s last close at $34.34, valuation watchers are taking notice. The latest consensus pricing hints that the market might be missing a key ingredient supporting this higher target.

    Multi-year minimum volume contracts with Hess Corp (now under Chevron), providing highly predictable, inflation-resistant fee-based revenue streams through the late 2030s. This supports stable adjusted EBITDA and consistent dividend/distribution growth.

    Read the complete narrative.

    Wondering why this price target runs so high? The engine here is built on relentless profit growth, expanding margins, and bold assumptions that everything stays on track. What are analysts betting on to justify such optimism? Click through to unlock the surprising growth levers that power this narrative’s outlook.

    Result: Fair Value of $44.17 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, any unexpected production slowdown from Chevron or intensified local regulatory pressures could quickly undermine the positive long-term thesis for Hess Midstream.

    Find out about the key risks to this Hess Midstream narrative.

    Build Your Own Hess Midstream Narrative

    If you want to dig deeper or have a different perspective, you can quickly shape your own view using the same data in just a few minutes. Do it your way

    A great starting point for your Hess Midstream research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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    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.