Why Is HESS MIDSTREAM LP A (HESM) Stock Down Today?

Hess Midstream LP (HESM) shares fell 14.63% to close at $33.03 on Tuesday. The sharp decline followed the announcement of a definitive agreement in which Chevron will divest its ownership interests in Hess Midstream and DJ Basin crude midstream assets. This transaction includes a $200 million cash payment and is expected to reduce Bakken unit midstream costs by approximately 50%.

What Happened

Hess Midstream disclosed a definitive agreement for the acquisition of DJ Basin assets and a revised business strategy. Under the new terms, Chevron will transfer its interests in Hess Midstream and the DJ Basin assets for $200 million in cash. The restructuring is designed to lower midstream costs for the Bakken unit by about half.

The company also issued updated financial guidance. Hess Midstream projects full-year 2026 adjusted EBITDA of $1.225 billion to $1.25 billion. For fiscal year 2027, the company expects adjusted EBITDA to decline to a range of $850 million to $950 million. Management targets 5% annual distribution growth per Class A share for the third and fourth quarters of 2026. Adjusted free cash flow for 2026 is expected to be between $525 million and $625 million, with a gross adjusted EBITDA margin of 75%.

JP Morgan downgraded the stock to Underweight while maintaining a price target of $39. The firm cited the lower 2027 outlook and the Chevron restructuring as key factors in the rating change.

What The Data Shows

The stock printed 12 fresh 52-week lows on October 7, 2026. Over the last eight sessions, the share price has dropped 15.3%, moving from $38.48 to $32.58. The current market cap stands at $4.9 billion with a P/E ratio of 13.4. The company maintains a dividend yield of 8.21% and a beta of 0.56. Revenue has grown 2.8% on a trailing twelve-month basis, and the net margin is 23.2%.

Unusual options activity in the last 36 hours showed one notable print with $1.0 million in put premium and no call premium. The largest single print was $1.0 million. The 52-week range for the stock is $31.63 to $41.44.

What To Watch

Investors should monitor the execution of the Chevron asset transfer and the impact of the reduced 2027 EBITDA guidance on future distribution sustainability. The company’s target for 5% annual distribution growth in the second half of 2026 will be a key metric to track as the restructuring takes effect.