WES Stock Fair Value – Barclays Raises Price Target for Western Midstream to $33, Maintains Overweight Rating
January 30, 2023
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WES Stock Fair Value – Western Midstream Partners ($NYSE:WES) LP (WESTERN MIDSTREAM) is a growth-oriented limited partnership that is engaged in the gathering, processing, compressing, treating, and transportation of natural gas, crude oil, condensate, and produced water. It focuses on serving producers in the most active natural gas and crude oil producing areas in the United States. It is headquartered in Houston, Texas, and operates in the Permian Basin, Mid-Continent, and Rocky Mountain regions. Western Midstream’s third quarter performance was driven by strong organic growth and high demand for its services. The company has also made strategic acquisitions to expand its presence in the Permian Basin and Mid-Continent regions.
In addition, it is focused on improving operational efficiencies and cost savings by streamlining processes and cutting costs. Going forward, Western Midstream is well-positioned to benefit from strong demand for its services as producers continue to increase activity in the Permian Basin and other regions. Its focus on operational efficiencies, cost savings, and strategic acquisitions should help it maintain its strong financial performance. As a result, Barclays is optimistic about Western Midstream’s long-term prospects and has raised its Price Target to $33 while maintaining its Overweight rating.
Price History
On Wednesday, Western Midstream Partners LP (WESTERN MIDSTREAM PARTNERS LP) stock opened at $28.3 and closed at $27.6, down by 2.1% from last closing price of 28.1. This is a positive sign for the company, especially considering the current state of the market. With oil prices in a slump and the pandemic impacting global economies, many energy companies have been struggling to remain profitable. For Western Midstream Partners LP, it is reassuring to see that Barclays still has faith in their prospects going forward. The company’s operations are primarily focused on gathering, processing, compressing, treating, and transporting natural gas, crude oil, condensate, and NGLs to major hubs.
These services are vital to the energy industry, and Western Midstream Partners LP has been able to capitalize on this by establishing a strong presence in some of the most prolific basins in the US. Despite this decrease in revenue, the company was still able to post a profit thanks to its cost cutting measures and cost optimization strategies. Overall, the news from Barclays bodes well for Western Midstream Partners LP and its investors. The increased price target could help boost investor confidence in the company and encourage more people to invest in it. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for WES. More…
| Total Revenues | Net Income | Net Margin |
| 3.19k | 1.1k | 35.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for WES. More…
| Operations | Investing | Financing |
| 1.87k | -426.5 | -1.38k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for WES. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 11.47k | 8.47k | 7.9 |
Key Ratios Snapshot
Some of the financial key ratios for WES are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.9% | 17.2% | 46.2% |
| FCF Margin | ROE | ROA |
| 44.8% | 30.5% | 8.0% |
VI Analysis – WES Stock Fair Value
Western Midstream Partners LP (WESTERN) is a publicly traded limited partnership that owns, operates, acquires and develops midstream energy assets. The company’s fundamentals reflect its long-term potential, and this can be seen through the analysis provided by the Value Investment (VI) App. According to the VI Line, the intrinsic value of WESTERN’s share is around $21.9. Currently, WESTERN shares are trading at $27.6, which is a 26% overvaluation from the intrinsic value. This indicates that investors may want to consider reevaluating their positions with this stock as it may be overpriced compared to its peers. The VI App also provides other valuable insights into WESTERN’s financial performance. Overall, WESTERN Midstream Partners LP offers investors a glimpse into its potential long-term prospects. The VI App provides a comprehensive analysis of the company’s financial performance and its intrinsic value, which can help investors make informed decisions when it comes to investing in WESTERN shares. Despite the current overvaluation of the company’s shares, investors should still consider evaluating their positions in this stock in order to maximize their returns. More…
VI Peers
The general partner is Anadarko Petroleum Corporation. The partnership owns, operates, develops and acquires midstream energy assets in the United States. The assets include natural gas gathering systems, natural gas processing plants, natural gas liquids (NGL) fractionation facilities, olefins production facilities, pipelines and natural gas and NGL storage facilities.
– Kinder Morgan Inc ($NYSE:KMI)
Kinder Morgan Inc is a leading energy infrastructure company in North America. They own an interest in or operate approximately 84,000 miles of pipelines and 157 terminals. Their pipelines transport natural gas, refined petroleum products, crude oil, and CO2. Terminals handle and store products such as petroleum, chemicals, ethanol, and coal. Kinder Morgan Inc’s market cap as of 2022 is 39.38B. Their ROE is 7.82%.
– Williams Companies Inc ($NYSE:WMB)
The Williams Companies, Inc. is an energy infrastructure company based in Tulsa, Oklahoma. It is engaged in natural gas processing and transportation, as well as oil and gas exploration and production. The company owns and operates a large network of natural gas pipelines, storage facilities, and processing plants in the United States. Williams also has a minority interest in a natural gas pipeline in Canada. The company was founded in 1908 and has a workforce of approximately 4,000 employees.
– Pembina Pipeline Corp ($TSX:PPL)
Pembina Pipeline Corporation is a leading transportation and midstream service provider that has been serving North America’s energy industry for over 65 years. Pembina owns and operates an integrated system of pipelines that transport crude oil, natural gas and natural gas liquids (NGLs). Pembina also owns and operates gas gathering and processing facilities and an NGL extraction business. With facilities strategically located in western Canada and in natural gas liquids-rich basins in the United States, Pembina delivers its services to customers where they need it most.
Summary
Barclays has raised its price target for Western Midstream Partners LP (WES) to $33 and maintained its overweight rating. Analysts at Barclays have highlighted the company’s position as an attractive income opportunity for investors. They view WES as an integrated midstream provider with solid geographic diversification, and believe it has a strong balance sheet and liquidity position.
They also anticipate that its growth projects will drive significant cash flow generation. The analysts are also positive on WES’ near-term outlook, with upside potential from margin expansion, increased cash flow, and dividend coverage.
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