Hess Midstream Partners LP (HESM) PT Raised to $44 at Citi

Citi analyst Douglas Irwin raised the price target on Hess Midstream Partners LP (NYSE: HESM) to $44.00 (from $41.00) while maintaining a Buy rating.

The analyst comments "We increase our target price to $44 (from $41) to reflect an improving FCF profile beyond 2027. While 2025 capex guidance of ~$300mm came in above our prior estimate, we now anticipate a meaningful step lower in capex once additional processing capacity enters service in 2027. Management pointed toward having line of sight to FCF growth through the end of the decade, which we expect to be driven by a combination of EBITDA growth and declining capex. Specifically, we see capex trending toward $125mm over time as HESM completes its existing project backlog. As a result, we expect FCF growth to outpace EBITDA growth over the medium-term, allowing for a continuation and possibly even an acceleration of the existing capital allocation program. We estimate nearly $2.5bln of buybacks over the next five years, which equates to >25% of HESM’s market cap, while also allowing for >10% annual distribution growth."

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