Having completed multiyear infrastructure projects on time and on budget, Hess Midstream projects significantly lower capital spending—approximately $150 million in 2026, a 40% reduction from 2025. The company's strategic positioning emphasizes 10% annualized free cash flow growth through 2028, driven by lower capital spend and inflation escalators, generating approximately $1 billion of financial flexibility for shareholder returns and debt reduction.
Cyborg Score Rationale
Hess Midstream is rated a strong buy with an 8.8% yield and robust free cash flow protected by minimum volume commitments through 2033. The company benefits from contracted revenues and a transition to higher-margin cash generation, though growth is moderating.
Top Insights
2025 adjusted EBITDA reached $1.238 billion with gas processing averaging 445 MMcf/day, crude terminaling at 129 kbbl/day, and water gathering at 131 kbbl/day
The company prioritizes financial strength with leverage expected to decrease below 3x Adjusted EBITDA long-term
5% annual distribution growth through 2027 is fully covered by cash flow with 5% CPI-linked fee escalators; buybacks remain highly accretive at current prices
Basin maturation and Chevron's Bakken drilling shifts pose risks that could cap volumes and compress margins
Named Competitors
Enterprise Products Partners — Diversified midstream infrastructure for oil, gas, and liquids
Magellan Midstream Partners — Transportation and storage of crude oil, refined products, and natural gas liquids
Summit Midstream Partners — Midstream infrastructure focused on natural gas gathering and processing
Recent Developments
(February 2026) Q4 2025 earnings beat estimates with EPS of $0.72 vs. $0.69 consensus; severe winter weather impacted volumes
(December 2025) 2026 guidance issued: $1.225B–$1.275B EBITDA, 5% distribution growth through 2028, and $1B excess free cash flow through 2028
(January 2026) Placed new compressor station into service to support future gas volume growth
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