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The Bull Case For Hess Midstream (HESM) Could Change Following Strong Q3, Dividend Hike and Upbeat Guidance

Simply Wall St·11/10/2025 02:18:49
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  • Hess Midstream LP reported strong third quarter results with revenue of US$420.9 million and net income of US$97.7 million, announced an increased quarterly cash distribution, completed a US$70 million share buyback, and provided higher net income guidance for the remainder of 2025.
  • The company’s dividend increase follows excess free cash flow and recent accretive buybacks, resulting in a distribution above its targeted annual growth rate through 2027.
  • We'll explore how Hess Midstream's raised earnings guidance and dividend increase reinforce its investment narrative built on stable cash flows.

Find companies with promising cash flow potential yet trading below their fair value.

Hess Midstream Investment Narrative Recap

To be a shareholder in Hess Midstream, you need to believe in its ability to secure stable, long-term cash flows primarily from Bakken infrastructure and steady throughput commitments with Hess Corp (now part of Chevron). The latest earnings release, dividend hike, and buyback announcement support that investment story, but they do not fundamentally change the key short-term catalyst, continued robust production from Hess Corp, or address the main risk that any slowdown in Bakken activity from Chevron could reduce volumes and pressure overall returns.

Most relevant to the current narrative is the raised earnings guidance for year-end 2025, reflecting management's increased confidence in contract-driven revenue streams and recent volume performance. This update reinforces the company’s pitch of predictability, yet forward guidance remains tied to external upstream decisions, which could shift if Chevron reprioritizes capital spending, affecting throughput and margin visibility.

However, investors should be aware that should Chevron alter its Bakken drilling strategy, the company’s cash flow profile could quickly look quite different...

Read the full narrative on Hess Midstream (it's free!)

Hess Midstream's narrative projects $2.1 billion revenue and $769.1 million earnings by 2028. This requires 9.8% yearly revenue growth and a $478.2 million earnings increase from $290.9 million today.

Uncover how Hess Midstream's forecasts yield a $37.00 fair value, a 9% upside to its current price.

Exploring Other Perspectives

HESM Community Fair Values as at Nov 2025
HESM Community Fair Values as at Nov 2025

Six private investors in the Simply Wall St Community put Hess Midstream’s fair value estimates between US$11.87 and US$73.54 per share. With long-term contracts helping underpin earnings guidance, there is still room for concern over future throughput if Chevron’s priorities change, making it worth comparing multiple viewpoints.

Explore 6 other fair value estimates on Hess Midstream - why the stock might be worth less than half the current price!

Build Your Own Hess Midstream Narrative

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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.