NEW YORK, August 22, 2026, 9:20 a.m. EDT — U.S. financial markets remain shut.
- Hess Midstream ended Friday at $39.14, falling 3.4% over the week.
- The most recent quarterly payout of $0.7888 equates to an annualized yield of 8.1%.
- Initial estimates suggest free-cash-flow coverage for 2026 is around 1.43 times.
- The average target price on Wall Street is $37.50, which is 4.2% under Friday’s closing level.
Hess Midstream LP NYSE:HESM closed the week with a notable divergence between income and valuation. The partnership’s annualized cash yield stands above 8%, while analysts generally anticipate minimal gains in the stock price.
The stock ended Friday, August 21, at $39.14, representing a 3.4% drop from its previous Friday close of $40.53. This came even as shares rose 0.1% during the last session.
| Market measure | Value | Investor read-through |
|---|---|---|
| August 21 close | $39.14 | NYSE closing price, 4:00 p.m. EDT |
| Weekly change | -3.4% | Compared with August 14 finish |
| Quarterly distribution | $0.7888 | Distributed on August 14 |
| Annualized distribution | $3.1552 | Calculated using four times most recent quarter |
| Implied yield | 8.1% | Initial estimate |
The yield is supported by stronger cash conversion rather than higher revenue. Adjusted free cash flow for the second quarter increased by 19.5% compared to a year ago, while revenue declined 3.7%.
The difference was largely attributed to capital spending. Expenditures declined by 56% to $30.6 million following the completion of compression expansion activities. Adjusted EBITDA decreased by under 1%.
| Second-quarter metric | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $399.0 million | $414.2 million | -3.7% |
| Adjusted EBITDA | $313.7 million | $316.0 million | -0.7% |
| Adjusted free cash flow | $231.6 million | $193.8 million | +19.5% |
| Capital expenditure | $30.6 million | $70.0 million | -56.3% |
| Basic EPS | $0.75 | $0.74 | +1.4% |
Chief Executive Jonathan Stein stated that the company continues to prioritise “generating Adjusted Free Cash Flow to support continued shareholder returns and balance sheet strength.” Current cash flow trends back up this assertion. Company results
The board approved a $0.0096 increase to the quarterly distribution, raising it to $0.7888. Stein stated that this uptick aligns with the company’s goal of 5% annual distribution growth through 2028.
| 2026 company outlook | Low | High | Midpoint |
|---|---|---|---|
| Net income | $650 million | $700 million | $675 million |
| Adjusted EBITDA | $1.225 billion | $1.275 billion | $1.250 billion |
| Adjusted free cash flow | $910 million | $960 million | $935 million |
| Planned distributions | — | — | $655 million |
| Cash flow remaining after distributions | — | — | $280 million |
Preliminary adjusted free-cash-flow coverage at the midpoint of guidance stands at approximately 1.43 times the targeted distribution. The outstanding $280 million represents nearly 43% of the intended payout.
The market does not value that cushion as growth equity. The most recent analyst consensus lists an average target of $37.50, with two sell recommendations and five holds. This target is 4.2% under Friday’s closing price.
| Analyst | Firm | Rating | Target | Versus $39.14 |
|---|---|---|---|---|
| John Mackay | Goldman Sachs | Sell | $32 | -18.2% |
| Robert Kad | Morgan Stanley | Sell | $39 | -0.4% |
| Jeremy Tonet | J.P. Morgan | Hold | $39 | -0.4% |
| Not identified | UBS | Hold | $37 | -5.5% |
| Praneeth Satish | Wells Fargo | Hold | $40 | +2.2% |
Caution remains active. Oil terminaling volumes decreased 15% year-on-year, while water gathering was down 12%. Gas processing slipped 4% due to scheduled maintenance at Tioga.
Chevron Corporation NYSE:CVX continues to play a key role in the case. Affiliate services accounted for $379.8 million, making up 95% of revenue for the quarter. Revenue from third parties rose over twofold, yet remained limited at $17.9 million.
Risks: Reduced activity in the Bakken may challenge projected volumes. Distribution coverage could also be tightened by customer concentration, leverage, and interest expenses.
Investors will monitor if HESM maintains Friday’s $38.57 intraday low next week. There is no earnings report scheduled, keeping the focus on its 8% cash yield amid subdued volume momentum and limited analyst target movement.
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