Hess Midstream LP (NYSE:HESM) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to US$37.18 in the week after its latest first-quarter results. It looks like the results were a bit of a negative overall. While revenues of US$382m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.4% to hit US$0.65 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the six analysts covering Hess Midstream are now predicting revenues of US$1.65b in 2025. If met, this would reflect a decent 8.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 50% to US$3.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.66b and earnings per share (EPS) of US$2.64 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.
View our latest analysis for Hess Midstream
There's been no major changes to the consensus price target of US$44.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Hess Midstream, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$41.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Hess Midstream's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 8.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Hess Midstream is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hess Midstream's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$44.00, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hess Midstream going out to 2027, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Hess Midstream that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.