Street Calls of the Week
Investing.com - UBS maintained its Neutral rating and $43.00 price target on Hess Midstream Partners LP (NYSE:HESM) following the company’s updated guidance reflecting Chevron’s planned reduction in Bakken rig activity. The target sits within the broader analyst range of $41-48, with InvestingPro data showing the stock currently trading near $39.50.
Chevron will decrease its Bakken drilling operations from four to three rigs starting in the fourth quarter of 2025, according to UBS analyst commentary on Hess Midstream’s latest financial and operational outlook.
Despite the reduced rig count, Hess Midstream continues to expect long-term growth in gas throughput volumes through at least 2027, though oil throughput volumes are now projected to plateau in 2026 as a direct result of the lower planned drilling activity.
The company anticipates throughput volumes will remain above its established minimum volume commitments (MVCs), providing a floor for its operational performance despite the changes in Chevron’s drilling plans.
Hess Midstream expects relatively flat Adjusted EBITDA in 2026 compared to 2025, with growth resuming in 2027 driven by increases in gas throughput volumes and inflation escalation provisions built into its existing commercial agreements.
In other recent news, Hess Midstream LP has announced a revised financial outlook due to Chevron’s decision to reduce its Bakken drilling activity from four rigs to three starting in the fourth quarter of 2025. This change is expected to result in relatively flat Adjusted EBITDA in 2026, with growth anticipated to resume in 2027 driven by increased gas throughput volumes. Oil throughput volumes are projected to plateau in 2026 as a result of the reduced rig activity. Wells Fargo has downgraded Hess Midstream from Overweight to Equal Weight, citing the reduced growth prospects and capital return potential. Similarly, UBS downgraded the company from Buy to Neutral, noting concerns over potential reduced drilling activity in the Bakken region due to low commodity prices. Additionally, Hess Midstream has announced a leadership change, with John A. Gatling resigning as President and Chief Operating Officer. Michael S. Bast has been appointed to succeed Gatling, effective September 26. Bast has a long history with Hess Corporation, having overseen various operations in the Bakken region.
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