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Hess Midstream Partners LP (NYSE:HESM) stock soared to an all-time high of $42.63, marking a significant milestone for the company’s market performance. According to InvestingPro data, the company currently shows signs of being undervalued based on its Fair Value analysis, with a robust financial health score of "GREAT." This peak reflects a robust year-over-year growth, with the stock delivering an impressive 28.9% total return over the past 12 months. The company maintains a strong 76.8% gross profit margin and has consistently raised its dividend for eight consecutive years, currently offering a 6.7% yield. Investors have shown increased confidence in HESM’s business model and future prospects, as the company continues to capitalize on strategic initiatives and operational efficiencies within the midstream energy sector. The all-time high serves as a testament to Hess (NYSE:HES) Midstream’s strong financial health and its potential for sustained growth in the competitive market landscape. For deeper insights into HESM’s valuation and growth prospects, including 12 additional ProTips and comprehensive financial metrics, explore the full research report available on InvestingPro.
In other recent news, Hess Midstream Partners LP reported its financial results for the fourth quarter of 2024, exceeding earnings expectations with an earnings per share of $0.68, although revenue slightly missed projections at $388.5 million. The company also announced an $800 million offering of senior unsecured notes due in 2028, with proceeds earmarked to redeem existing notes due in 2026, as part of its strategy to manage its debt profile. Additionally, Hess Midstream has initiated a public offering of 10 million Class A shares through an affiliate of Global Infrastructure Partners, with Goldman Sachs serving as the bookrunning manager.
Citi analyst Douglas Irwin has raised the price target for Hess Midstream from $41.00 to $44.00, maintaining a Buy rating, citing optimism about the company’s future free cash flow profile. This optimism is supported by anticipated capital expenditure reductions and projected free cash flow growth outpacing EBITDA growth. Hess Midstream management has indicated a path to free cash flow growth, with expectations for capital expenditures to trend toward $125 million over time.
The company projects significant growth for 2025, with net income expected to reach up to $765 million and adjusted EBITDA anticipated to grow by 11%. Looking further ahead, Hess Midstream plans to expand its gas processing capabilities, with new projects set to increase capacity significantly by 2027. The firm’s capital allocation program is also expected to continue, with potential for substantial shareholder returns, including buybacks and distribution growth.
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