Hess Midstream (HESM) Dropped, So What Is Driving Attention Now?

Hess Midstream (HESM) is back in focus after Chevron agreed to divest its ownership stake and DJ Basin crude oil assets to the partnership in exchange for revised Bakken contracts and cash.

The Chevron deal has landed in the middle of a sharp reset in sentiment toward Hess Midstream, with the share price down 17.2% over the past 30 days and 14.8% over 90 days, as investors digest lower FY26 and FY27 guidance and the shift to an independent, multi basin model. Even with that pullback and a 1 year share price performance that sits slightly lower once distributions are stripped out, total shareholder return over the past 12 months remains 7.5%. The 5 year total shareholder return of 84.2% points to meaningful long term value creation for investors who have been willing to ride out periods like this when growth expectations and risk perceptions are being recalibrated.

Capitalize on this reset in sentiment around Hess Midstream and scan a curated 29 high quality undervalued stocks that may offer similar fee-based cash flow profiles with more appealing entry points.

Hess Midstream still generates fee-based cash flows and long-term contracts after the Chevron reset. The key question now is whether that stability is already fully priced in after the sell-off.

Most Popular Narrative: 11.9% Undervalued

Against the last close of $33.03, the most followed narrative anchors Hess Midstream’s fair value at $37.50. This frames the current sell off as a pricing gap rather than a thesis break.

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 depends heavily on Chevron keeping Bakken volumes on plan and on minimum volume commitments not stepping down faster than expected.

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

Next Steps

Sentiment around Hess Midstream is clearly split, with some investors focused on the risk side while others lean into the potential upside story. Move quickly and review the data yourself by weighing the 4 key rewards and 2 important warning signs.

Looking for more Hess Midstream style ideas?

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• Target resilient compounding potential by reviewing a focused 29 high quality undervalued stocks that lines up quality fundamentals with prices that may still lag underlying business strength.
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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.

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