Chevron’s decision to sell its Hess Midstream (HESM) stake and accept lower Bakken fees from 2027 to 2033 has reset earnings guidance, while a renewed infrastructure commitment through 2045 reframes the partnership’s long-term profile.
The Chevron exit and fee reset have come alongside a sharp shift in Hess Midstream’s trading pattern, with the 30 day share price return down 19.97% and the 90 day share price return down 23.11%, even though the latest 1 day move was a 1.90% gain to US$30.61.
That pullback contrasts with a more resilient longer term picture. The total shareholder return over one year is down 1.55%, while the three year total shareholder return is 29.94% and the five year total shareholder return is 79.20%. This suggests longer term holders have still seen substantial value from the units despite the recent reset in expectations.
Scan how other midstream and energy infrastructure plays are reacting by checking our hand picked 42 power grid technology and infrastructure stocks alongside Hess Midstream’s reset with Chevron.
After a selloff this sharp and a reset in fees locked in for years, the real fork in the road is simple: step into Hess Midstream here, or wait for the market to ask for an even cheaper price?
Most Popular Narrative: 13% Undervalued
Hess Midstream closed at $30.61, while the most followed narrative anchors fair value closer to $35.33. This frames today’s weakness through a discounted cash flow lens rather than just sentiment.
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 46 investors see Hess Midstream as 13% undervalued.
Result: Fair Value of $35.33 (UNDERVALUED)
Still, Hess Midstream’s reliance on Chevron’s Bakken volumes, along with the planned step down in minimum volume commitments after 2028, could unsettle that fair value narrative.
Find out about the key risks to this Hess Midstream narrative.
Next Steps
Sentiment around Hess Midstream is clearly split, which is why it helps to get closer to the numbers yourself and pressure test the story from both sides. To evaluate those competing risks and rewards directly, start with the 3 key rewards and 3 important warning signs.
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