A Look at Western Midstream Partners's Valuation as Investors Weigh Steady Revenue Growth

Western Midstream Partners (WES) has delivered solid year-over-year growth, with revenue and net income both up around 7% and 9%, respectively. Investors keeping an eye on the midstream sector may find these trends worth noting.

See our latest analysis for Western Midstream Partners.

Western Midstream Partners’ share price has been treading water for much of the year, even as the broader energy sector remains active. Its one-year total shareholder return of nearly 8% hints at the steady rewards long-term investors have seen. With momentum building over the past three and five years, it still stands out for those prioritizing compounding returns over short-term hype.

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With shares trading just below analyst targets and a consistent record of revenue growth, the question remains open: is Western Midstream Partners currently undervalued or is the market already reflecting all of its future potential?

Most Popular Narrative: 4.9% Undervalued

Western Midstream Partners' prevailing narrative points to a fair value just above its $39.00 closing price. This suggests mild upside. The latest consensus reflects modest changes in sector assumptions and a closely watched discount rate.

Investment in major long-term capacity expansions, such as the Pathfinder pipeline and North Loving II plant, are set to come online in 2027. These additions are projected to significantly increase processing and transport capability, and are expected to materially increase revenues and cash flows in subsequent years.

Read the complete narrative.

Curious why this narrative assigns more value to future infrastructure than the market does today? The bold call rests on ambitious growth plans, margin gains, and a valuation anchored in evolving fundamentals. Ready to see which projections justify a premium over current prices? Dive deeper into the assumptions fueling this price target.

Result: Fair Value of $41 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy reliance on large-scale projects and exposure to shifts in energy demand could quickly alter the company's growth outlook and margin trajectory.

Find out about the key risks to this Western Midstream Partners narrative.

Build Your Own Western Midstream Partners Narrative

If you’d rather chart your own course or test the story against your analysis, you can build a fresh perspective in just a few minutes. Do it your way

A great starting point for your Western Midstream Partners research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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