Hess (HES) is expected to issue a "positive" operational update when it releases its Q4 results along with a 2025 growth outlook focused on the Yellowtail offshore oil project in Guyana, UBS said in a note Wednesday.

Shares of the oil and gas producer are also seen to be still benefitting from "near-term CVX catalysts," the firm said, referring to Chevron's (CVX) $53 billion proposed acquisition of Hess. UBS analysts said they see Hess as a "better way to get upside leverage" on Chevron, "with a 3.5:1 risk/reward should the transaction close in 3Q25."

The closing of the Hess-Chevron merger has been delayed by a dispute with Exxon Mobil (XOM) over Hess' oil assets in Guyana, with arbitration hearings expected in the next few months, according to recent media reports.

Hess' Q4 results are expected to be underpinned by a rebound in Guyana volumes after downtime in Q3, the investment firm said. Yellowtail's ramp to full capacity is anticipated in 2026, after the start of production later this year, the analysts said.

UBS reiterated a buy rating on the stock with $185 price target.

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