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Investing.com - UBS lowered its price target on Hess Midstream Partners LP (NYSE:HESM) to $34.00 from $43.00 while maintaining a Neutral rating on the stock. The company, currently trading near its 52-week low of $31.72, offers a substantial 9.29% dividend yield.
The price target reduction follows Hess Midstream’s mid-September announcement of updated financial and operational guidance for 2025, 2026, and 2027.
The midstream company’s guidance change was based on an expected decrease in Bakken rig activity by Chevron, which plans to reduce its rig count from four to three starting in the fourth quarter of 2025.
UBS’s new $34 price target is based on a 9.4x next-twelve-months multiple on the firm’s 2027 earnings estimates, down from the previous 10.6x multiple as growth is slowing down.
The 9.4x multiple represents the average of Hess Midstream’s peer group, which includes DKL, KNTK, MPLX, TRGP, OKE, PAA, LNG, SUN, EPD, PPL, WES, and PAGP.
In other recent news, Hess Midstream has updated its financial and operational outlook due to Chevron’s decision to reduce Bakken rig activity from four to three rigs starting in the fourth quarter of 2025. This adjustment has led the company to anticipate relatively flat Adjusted EBITDA in 2026 compared to 2025, with growth expected to resume in 2027 due to increased gas throughput volumes. Hess Midstream projects that oil throughput volumes will plateau in 2026, while gas throughput volumes are expected to continue growing through at least 2027.
The company’s stock has experienced volatility following these developments, with Wells Fargo downgrading Hess Midstream from Overweight to Equal Weight and reducing its price target to $39.00. UBS has maintained its Neutral rating with a $43.00 price target, reflecting the impact of Chevron’s reduced rig activity. Additionally, Goldman Sachs has reinstated coverage of Hess Midstream with a Neutral rating and a $36.00 price target. These ratings highlight the cautious stance analysts are taking in light of the company’s revised growth prospects.
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