Did Raised 2025 Gas Volume Guidance Just Shift Hess Midstream's (HESM) Investment Narrative?

• On September 18, Hess Midstream raised its full-year 2025 guidance for gas gathering volumes, emphasizing a continued commitment to strong cash flow and shareholder capital returns.
• This upgraded outlook signals the company’s confidence in operational momentum, particularly as it seeks to optimize throughput amid robust U.S. energy demand trends.
• We'll now explore how this higher gas volume guidance affects Hess Midstream's investment narrative and expectation of resilient cash generation.

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Hess Midstream Investment Narrative Recap

Hess Midstream shareholders are generally betting on resilient cash flows underpinned by steady Bakken production and robust U.S. gas demand, protected in part by long-term fee-based contracts with Hess Corp, now part of Chevron. The recent upward revision of 2025 gas volume guidance supports this narrative, but with the company still highly exposed to production trends and capital decisions in the Bakken, the short-term catalyst remains throughput growth, while any shift in Chevron’s drilling or capital allocation strategy remains a key risk; the news itself marginally strengthens the investment thesis, but does not materially change immediate risks or opportunities.

Among recent developments, the Q3 and full-year 2025 earnings guidance was lowered just before this gas volume update, reflecting operational headwinds earlier in the year. This revised outlook places greater importance on the company’s ability to deliver the higher forecasted volumes, as investors watch for sustained cash generation amid changing weather and operational conditions.

Yet, investors should also be mindful that, in contrast to the confidence signaled by higher gas guidance, the reliance on Chevron’s ongoing commitment to Bakken production remains a key consideration…

Read the full narrative on Hess Midstream (it's free!)

Hess Midstream's narrative projects $2.1 billion revenue and $769.1 million earnings by 2028. This requires 9.8% yearly revenue growth and an earnings increase of $478.2 million from current earnings of $290.9 million.

Uncover how Hess Midstream's forecasts yield a $44.17 fair value, a 28% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have assessed Hess Midstream's fair value anywhere from US$11.87 to US$66.76, based on four unique forecast models. As you compare these divergent views, remember that stable volumes anchor the company's near-term cash flow outlook but longer-term risks still hinge on Chevron's strategic direction in the Bakken.

Explore 4 other fair value estimates on Hess Midstream - why the stock might be worth less than half the current price!

Build Your Own Hess Midstream Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hess Midstream research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Hess Midstream research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hess Midstream's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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