Analyst Estimates: Here's What Brokers Think Of Hess Midstream LP (NYSE:HESM) After Its Yearly Report
Hess Midstream LP (NYSE:HESM) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of US$1.3b and statutory earnings per share of US$2.08. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Hess Midstream
Following the latest results, Hess Midstream's six analysts are now forecasting revenues of US$1.50b in 2024. This would be a meaningful 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 49% to US$2.59. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.52b and earnings per share (EPS) of US$2.72 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$34.40, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hess Midstream, with the most bullish analyst valuing it at US$38.00 and the most bearish at US$31.00 per share. This is a very narrow spread of estimates, implying either that Hess Midstream is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Hess Midstream'shistorical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 12% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 0.01% per year. So it's pretty clear that Hess Midstream is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hess Midstream. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Hess Midstream. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Hess Midstream going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for Hess Midstream (1 is concerning!) that you need to take into consideration.
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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.
