WES: Future Outlook Will Reflect Water Partnership Upside And Mixed Throughput Trends

Analysts have nudged their price target for Western Midstream Partners slightly higher to approximately 42 dollars per unit from 41 dollars previously, citing modest improvements in long term revenue growth expectations, a marginally lower discount rate, and a slightly higher anticipated future earnings multiple, even as projected profit margins ease fractionally.

What's in the News

• Iofina plc signed an agreement with Western Midstream to develop a new IOsorb plant in the Permian Basin that will use Western Midstream produced water as feedstock for iodine extraction (Client Announcements).
• The planned facility will be built, funded, and operated by Iofina, with design capacity to process approximately 50,000 barrels of brine water per day, about twice the capacity of current IOsorb plants (Client Announcements).
• Iofina expects the new plant, costing an estimated 8 to 9 million dollars, to become its largest producer with a target of 170 to 220 metric tonnes of crystalline iodine annually, with Western Midstream earning a royalty on production (Client Announcements).
• After iodine extraction, produced water will be returned to Western Midstream for disposal, transport, and recycling, leveraging the company’s expanded capabilities following its acquisition of Aris Water Solutions (Client Announcements).
• Western Midstream reported third quarter 2025 operating results, including 5.4 Bcf per day of natural gas throughput, a 2 percent sequential increase, and 510 thousand barrels per day of crude oil and NGLs throughput, a 4 percent sequential decrease, while produced water throughput held flat at 1,217 thousand barrels per day (Announcement of Operating Results).

Valuation Changes

• The consensus analyst price target fair value estimate has risen slightly to approximately 41.83 dollars per unit from 41 dollars.
• The discount rate has edged lower to about 7.01 percent from 7.01 percent previously, implying a marginally lower required return.
• The long-term revenue growth assumption has increased modestly to roughly 6.91 percent from 6.86 percent.
• The net profit margin forecast has eased slightly to about 38.33 percent from 38.37 percent.
• The future P/E targeted valuation multiple has risen moderately to about 14.6 times earnings from 14.3 times.