Hess Midstream LP

-14.62%

Hess Midstream just suffered a brutal 15% one day collapse, falling to about $33.03. But this is exactly where the story becomes interesting: the crash was triggered by a major restructuring, not by a sudden collapse in current cash generation. The Chevron transaction will make Hess Midstream independent while adding assets in the DJ Basin. However, Chevron will pay lower tariffs in the Bakken, reducing expected 2027 earnings. Management now sees 2027 adjusted EBITDA of $850–$950 million, with adjusted free cash flow of $525–$625 million and an EBITDA margin around 75%. The income story remains powerful. The latest quarterly distribution was $0.7888 per share, up from $0.7641 at the end of 2025. Distributions have increased steadily from $0.5696 in early 2023, demonstrating a strong track record of shareholder returns. The attraction is substantial cash flow, long term contracts through 2045 and potentially greater diversification. The risks are lower Bakken volumes, higher leverage and weaker 2027 earnings. At $33, the market appears to be pricing in a significant deterioration. Recovery could come if investors gain confidence in the new independent structure and cash flow remains strong. This review is for informational and educational purposes only, not financial advice.