Hess Midstream LP Cautiously Evaluates Valuation Amid Parent Acquisition
December 21, 2023
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Hess ($NYSE:HESM) Midstream LP (HESM) is a master limited partnership backed by global energy company Hess Corporation. The company focuses on downstream operations, such as midstream services and logistics, across the United States and internationally. HESM’s commitment to providing stable and profitable midstream operations has earned it a reputation as a reliable business partner. Recently, HESM has taken a conservative approach to both valuations and parent acquisitions. The goal is to ensure stability and maximize profits, while still expanding the business. HESM has prudently considered a number of potential parent acquisitions in order to increase its market presence and profitability.
In addition, HESM has also carefully reviewed the evaluations of its current assets, in order to ensure that they are performing at their highest potential. Hess Midstream LP is confident that its conservative approach to valuations and parent acquisitions will result in a stronger, more profitable business. Its commitment to long-term stability and profitability is evidenced by the company’s strong performance and continued success in the industry.
Share Price
On Tuesday, HESS MIDSTREAM LP stock opened at $31.1 and closed at $31.3, marking a modest increase of 0.5% from its prior closing price of 31.1. This is despite the announcement that the parent company, Hess Corporation, has entered into an agreement to be acquired by an affiliate of the energy investment firm Global Infrastructure Partners. The acquisition agreement has brought uncertainty to the valuation of HESS MIDSTREAM LP, with investors carefully evaluating the potential impact of the deal. Analysts are mostly optimistic, expecting the deal to provide HESS MIDSTREAM LP with additional access to capital and resources from Global Infrastructure Partners.
However, further details about the transaction remain to be seen. In the meantime, HESS MIDSTREAM LP continues to evaluate its operations and financials with caution. While they have seen a modest gain in share prices, investors are watching for further news on the acquisition and its effects on the company’s value and future prospects. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for HESM. More…
| Total Revenues | Net Income | Net Margin |
| 1.3k | 102.9 | 7.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for HESM. More…
| Operations | Investing | Financing |
| 860.6 | -238.2 | -622 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for HESM. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.66k | 3.22k | 4.42 |
Key Ratios Snapshot
Some of the financial key ratios for HESM are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 6.4% | 16.2% | 62.9% |
| FCF Margin | ROE | ROA |
| 48.1% | 169.2% | 14.0% |
Analysis
GoodWhale recently conducted an analysis of the wellbeing of HESS MIDSTREAM LP. After using our proprietary Star Chart, it became apparent that HESS MIDSTREAM LP is classified as a ‘rhino’, an entity that has achieved moderate revenue and earnings growth. We believe that this type of company can be attractive to investors seeking opportunities for capital appreciation and yield. Moreover, our analysis revealed that HESS MIDSTREAM LP has a high health score of 8/10 with regard to its cashflows and debt. This suggests that the company is well-positioned to sustain operations in times of crisis. Additionally, HESS MIDSTREAM LP appears to be strong in dividend and growth, medium in profitability, and weak in asset classes. Overall, this analysis presents a comprehensive picture of the company’s well-being and provides investors with a sense of the potential opportunities for return on investment. More…
Peers
The company’s assets include crude oil and natural gas gathering systems, pipelines, storage tanks, and terminals. Hess Midstream LP is headquartered in Houston, Texas. The company’s competitors include Rattler Midstream LP, EnLink Midstream LLC, Kinetik Holdings Inc.
– Rattler Midstream LP ($NYSE:ENLC)
EnLink Midstream LLC has a market cap of 5.96B as of 2022. The company’s return on equity is 32.09%. EnLink Midstream is engaged in the business of gathering, transporting, processing, marketing and storing natural gas and natural gas liquids (NGLs). The company operates in Oklahoma, Texas, Louisiana and New Mexico.
Summary
Hess Midstream LP is a midstream company that provides gathering, processing, storage, and terminal services to producers of natural gas and crude oil, as well as other businesses. Investors are taking to ‘hold’ on the company’s valuation due to the recent announcement that parent company Hess Corporation will be acquiring the remaining shares of Hess Midstream Partners LP. Hess Midstream’s shares have seen mixed results since the announcement, with some analysts cautioning investors to be cautious before investing in the company.
The short-term outlook for Hess Midstream appears uncertain as it remains to be seen how the acquisition will affect the company’s financials. For the long-term, however, investors are optimistic about Hess Midstream’s growth prospects as it continues to expand its asset base and market presence in the midstream industry.
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