• Hess Midstream has announced a new share repurchase program with JPMorgan Chase Bank, authorizing up to US$70 million in Class A share buybacks and initiating the cancellation of 1,136,627 shares, funded through the company’s existing credit facility.
• This development follows a rise in quarterly earnings, an increased dividend, and successful prior buybacks, highlighting continued strong cash flows and the company’s commitment to returning value to shareholders.
• We’ll assess how this substantial buyback initiative underpins Hess Midstream’s capital allocation outlook and overall investment thesis.

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Hess Midstream Investment Narrative Recap

To own Hess Midstream, you need confidence in ongoing sustained production in the Bakken and Chevron’s commitment to developing the region, since future throughput and distribution growth rely on this. The newly announced US$70 million buyback program with JPMorgan may reinforce capital return priorities, but it does not materially change the main short-term catalyst: continued robust Bakken output from Hess Corp (Chevron) and stable pipeline utilization. The biggest risk remains any shift in Chevron’s production plans or Bakken investment, potentially reducing volumes and impacting financial results.

Among recent developments, the second quarter’s strong earnings growth, from US$49.5 million to US$90.3 million year-over-year, stands out, underpinning the company’s capital return moves and supporting the sustainability of its distribution increases. This financial momentum helps provide context for the buyback, as cash flow strength gives management additional flexibility to pursue repurchases alongside higher dividends, both of which remain tied to the health of Bakken upstream activity.

On the other hand, it’s important for investors to consider the possibility that even aggressive buybacks can only do so much if...

Read the full narrative on Hess Midstream (it's free!)

Hess Midstream's narrative projects $2.1 billion revenue and $774.1 million earnings by 2028. This requires 9.8% yearly revenue growth and a $483.2 million earnings increase from $290.9 million currently.

Uncover how Hess Midstream's forecasts yield a $45.83 fair value, a 10% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members’ fair value estimates for Hess Midstream range from as low as US$5.78 to US$69.20, with four distinct perspectives contributing. With future throughput growth closely linked to Chevron’s Bakken production plans, you can explore how differing views reflect broader expectations about operational and cash flow certainty.

Explore 4 other fair value estimates on Hess Midstream - why the stock might be worth as much as 66% more than the current price!

Build Your Own Hess Midstream Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hess Midstream research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Hess Midstream research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hess Midstream's overall financial health at a glance.

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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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