Hess Midstream (HESM.N): Processing Drives 2Q Beat; Annual Guide Reiterated

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Hess Midstream (HESM.N): Processing Drives 2Q Beat; Annual Guide Reiterated

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03 Aug 2026 09:24:50 ET │ 9 pages

Hess Midstream (HESM.N)

Processing Drives 2Q Beat; Annual Guide Reiterated

CITI'S TAKE

Neutral HESM reported adj. EBITDA of ~$314mm, beating the $303mm Citi

estimate and $302mm Streat mean (Factset). Annual guidance was Price (31 Jul 26 16:00) US$40.83

reiterated despite the >$10mm beat relative to the quarterly guidance Target price US$37.00

midpoint. That said, the ~$1.25bln annual EBITDA midpoint appears to be Expected share price return -9.4%

an easier lift following the 2Q beat, particularly given previously messaged Expected dividend yield 7.6%

expectations of the year being back half weighted - we expect 3Q26 Expected total return -1.8%

guidance on this morning's earnings call which should provide more

Market Cap US$8,418M insight into the expected shape of the year. On the quarter, processing

margin and lower than anticipated G&A drove the beat vs our estimates.

Volumes were largely in-line, though crude gathering volumes came in

below our expectations, down ~6% QoQ and tracking below both MVC Douglas IrwinAC

levels and HESM's annual volume guide. Terminaling EBITDA held +1-212-816-9525

relatively flat QoQ. No buybacks during the quarter, as previously douglas.irwin@citi.com

disclosed. HESM paid down nearly $90mm on the revolver during the

quarter.

Implications — The quarter's beat is positive, though reiterated annual guidance

could somewhat temper the reaction - commentary on this morning's call around

the durability of the quarter's beat will likely factor into sentiment.

EPS (US$) Q1 Q2 Q3 Q4 FY FC Cons VA Cons

2025A 0.65A 0.74A 0.75A 0.72A 2.87A 2.86A 2.87A

2026E 0.68A 0.70E 0.74E 0.74E 2.86E 2.87E 2.83E