Hess Midstream LP (NYSE:HESM) stock dropped 6.3% on Friday after the company revised its guidance to reflect Chevron’s plan to scale back Bakken rig activity from four to three rigs beginning in the fourth quarter of 2025.
The midstream operator now expects 2026 Adjusted EBITDA to remain largely unchanged from 2025, with growth picking up again in 2027, supported by higher gas throughput and inflation-linked provisions under its existing agreements. While gas throughput is projected to keep rising through at least 2027, oil volumes are now forecast to level off in 2026 due to the reduced drilling program.
In response, Wells Fargo analyst Praneeth Satish cut Hess Midstream’s rating from Overweight to Equal Weight and lowered the price target from $48.00 to $39.00. “Our prior positive thesis on HESM was driven by growth under a 4-rig program with strong capital return and a buyout as upside. Under a 3-rig setup, the buyout is now the main catalyst,” Satish wrote.
The company also revised its 2025 gas throughput expectations, pointing to adverse weather, scheduled maintenance in the third quarter, and weaker-than-expected third-party volumes later in the year. Gas gathering volumes are now forecast to average 455–465 million cubic feet per day, while processing volumes are seen at 440–450 million cubic feet per day.
Hess Midstream added that capital expenditures will be substantially lower in 2026 and 2027 after halting preliminary work on the Capa gas plant and removing the project from its forward plan. Still, management reaffirmed its commitment to at least 5% annual growth in distributions per Class A share through 2027.
UBS analyst Manav Gupta reiterated a Neutral rating and a $43.00 target, noting that throughput levels are expected to remain comfortably above the company’s minimum volume commitments.
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