Education
About Us
Working with TipRanks
Follow Us
Western Midstream Partners (WES)
NYSE:WES
Top Page
Western Midstream Partners
(NYSE:WES)
77Outperform
Positive Factors
Cash Management
The free cash flow after dividends showed a significant increase from expected estimates, reflecting strong cash management.
Financial Performance
The net debt to EBITDA ratio improved compared to the previous year, indicating better financial leverage.
Growth Initiatives
Western Midstream Partners has announced the construction of the 'Pathfinder' pipeline, which aims to enhance its water handling and disposal capabilities, aligning with investor interest in growth.
Negative Factors
Capital Expenditure
WES' FY25 capex outlook of $625-775mn was higher than expected, and the partnership expects FY26 capex to be even higher.
Crude Oil and NGL Performance
Crude oil and NGL throughput experienced a notable decline compared to both the consensus and the previous year, indicating challenges in this area.
Produced Water Segment
Produced water adjusted gross margin fell short of expectations compared to the previous quarter and consensus estimates, suggesting potential issues in this segment.
Western Midstream Partners (WES) vs. S&P 500 (SPY)
Market Cap
$15.20B
Dividend Yield10.97%
Average Volume (3M)1.28M
Price to Earnings (P/E)11.9
Beta (1Y)0.51
Revenue Growth11.48%
EPS Growth-5.67%
CountryUS
Employees1,511
SectorEnergy
Sector Strength55
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.79
Shares Outstanding381,327,360
10 Day Avg. Volume1,336,350
30 Day Avg. Volume1,281,015
Financial Highlights & Ratios
PEG Ratio3.28
Price to Book (P/B)4.88
Price to Sales (P/S)0.00
P/FCF Ratio12.18
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.00Price Target Upside3.67% Upside
Rating ConsensusHold
Number of Analyst Covering7
Western Midstream Partners Business Overview & Revenue Model
Company DescriptionWestern Midstream Partners, LP, a midstream energy company, together with its subsidiaries, acquires, owns, develops, and operates primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. It also buys and sells natural gas, NGLs, and condensate. The company operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.
How the Company Makes MoneyWestern Midstream Partners generates revenue primarily through long-term, fee-based contracts with energy producers. These contracts typically involve gathering, processing, and transporting natural gas, crude oil, and NGLs from production sites to downstream markets or storage facilities. The company's revenue streams include fees for gathering and transportation services, processing and fractionation services, and storage services. WES benefits from strategic partnerships and joint ventures with major energy companies, allowing it to expand its infrastructure and enhance its service offerings. Additionally, the company's operations are supported by its parent company, Occidental Petroleum Corporation, which provides a stable source of volumes and growth opportunities, contributing significantly to WES's earnings.
Western Midstream Partners Financial Statement Overview
Summary
Western Midstream Partners demonstrates strong financial health across all verticals. The income statement shows excellent profitability and growth, the balance sheet reflects improving leverage and strong equity returns, and cash flow generation is robust, supporting future growth and stability. The company is well-positioned in the fossil fuels industry, with potential for sustained performance.Income Statement
Western Midstream Partners shows strong profitability with a high Gross Profit Margin of 75.6% and a Net Profit Margin of 43.6% for 2024. Revenue growth is robust, increasing by 16.0% from 2023 to 2024. EBIT and EBITDA margins remain solid at 54.7% and 51.7% respectively, indicating effective cost management and strong operational performance.86
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with an improving Debt-to-Equity Ratio of 0.30 in 2024, reflecting a decrease in leverage. Return on Equity is strong at 46.6%, suggesting effective use of equity financing. The Equity Ratio stands at 25.7%, indicating a stable capital structure, although it could be improved to reduce financial risk.72
Positive
Cash Flow
Cash flow generation is robust with a Free Cash Flow Growth Rate of 127.6% from 2023 to 2024. The Operating Cash Flow to Net Income Ratio is 1.34, reflecting strong cash conversion from earnings. Free Cash Flow to Net Income Ratio is also high at 1.34, indicating efficient cash management and the ability to support dividends or reinvestment.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.61B | 3.11B | 3.25B | 2.88B | 2.77B | Gross Profit |
| 2.78B | 2.18B | 2.25B | 2.00B | 2.09B | EBIT |
| 1.97B | 1.38B | 1.59B | 1.34B | 1.53B | EBITDA |
| 2.66B | 2.00B | 2.17B | 1.71B | 1.78B | Net Income Common Stockholders |
| 1.57B | 998.53M | 1.22B | 916.29M | 527.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.09B | 272.79M | 286.66M | 202.00M | 444.92M | Total Assets |
| 13.14B | 12.47B | 11.27B | 11.27B | 11.83B | Total Debt |
| 8.14B | 7.96B | 6.79B | 6.40B | 7.42B | Net Debt |
| 7.05B | 7.69B | 6.50B | 6.20B | 6.97B | Total Liabilities |
| 9.77B | 9.44B | 8.16B | 8.18B | 8.93B | Stockholders Equity |
| 3.24B | 2.90B | 3.11B | 3.10B | 2.90B |
| Cash Flow | Free Cash Flow | |||
| 1.27B | 926.25M | 1.21B | 1.45B | 1.21B | Operating Cash Flow |
| 2.11B | 1.66B | 1.70B | 1.77B | 1.64B | Investing Cash Flow |
| -39.17M | -1.61B | -218.24M | -257.54M | -448.25M | Financing Cash Flow |
| -1.25B | -67.91M | -1.40B | -1.75B | -844.20M |
Western Midstream Partners Technical Analysis
Positive
39.55
Price Trends
38.86
Positive
39.39
Positive
38.27
Positive
Market Momentum
0.04
Negative
58.32
Neutral
95.03
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WES, the sentiment is Positive. The current price of 39.55 is above the 20-day moving average (MA) of 37.78, above the 50-day MA of 38.86, and above the 200-day MA of 38.27, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 58.32 is Neutral, neither overbought nor oversold. The STOCH value of 95.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WES.
Western Midstream Partners Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $8.90B | 21.61 | 19.71% | 4.84% | 5.03% | 7.15% | |
78 Outperform | $10.43B | 28.06 | 8.29% | 2.95% | 10.83% | -10.47% | |
77 Outperform | $15.20B | 11.92 | 39.79% | 10.97% | 11.48% | -5.67% | |
76 Outperform | $8.37B | 15.26 | 49.74% | 6.97% | 8.77% | 15.22% | |
72 Outperform | $12.36B | 18.92 | 9.43% | 7.65% | 3.40% | -20.48% | |
57 Neutral | $14.16B | 25.38 | 10.09% | 7.15% | 3.40% | -15.90% | |
56 Neutral | $7.25B | 3.36 | -3.66% | 5.65% | 0.66% | -50.71% |
* Energy Sector Average
Performance Comparison
WES
Western Midstream Partners
39.55
3.96
11.13%
PAA
Plains All American
17.28
0.83
5.05%
PAGP
Plains GP Holdings
18.44
0.97
5.55%
AM
Antero Midstream
18.85
4.77
33.88%
HESM
Hess Midstream Partners
38.86
5.97
18.15%
DTM
DT Midstream
103.53
39.04
60.54%
Western Midstream Partners Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 10.01%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant achievements such as the commissioning of the North Loving plant and a strong financial position. However, concerns about sequential throughput declines, market volatility, and commodity price impacts were also highlighted.Q1-2025 Updates
Positive Updates
North Loving Plant Commissioning
The North Loving plant in the Delaware Basin was completed and became operational in February, increasing West Texas natural gas processing capacity by approximately 13% or 250 million cubic feet per day.
Strong Balance Sheet and Liquidity
Western Midstream has an investment grade credit rating, net leverage below three times, and approximately $2.4 billion of liquidity.
Positive Conversations for Pathfinder Pipeline
Positive discussions with customers and midstream providers for contracting pipe space on the Pathfinder produced water pipeline, expected to be in service by January 2027.
Adjusted Gross Margin Increases
Natural gas assets saw an adjusted gross margin increase of $0.05 per thousand cubic feet, and crude oil and NGL assets increased by $0.17 per barrel compared to the prior quarter.
Distribution Increase
Declared a quarterly distribution of $0.91 per unit, representing a 4% increase over the prior quarter's distribution.
Negative Updates
Sequential Throughput Decline
Natural gas throughput decreased by 2% and crude oil and NGL throughput decreased by 6% on a sequential quarter basis.
Revenue Recognition Adjustments
An $8 million decrease in adjusted gross margin was primarily due to decreased throughput and non-recurring favorable revenue recognition adjustments from the prior quarter.
Market Volatility and Commodity Price Concerns
Recent market volatility and commodity price weakness are causing producers to evaluate their operational plans, potentially impacting future growth.
Company Guidance
During the Western Midstream Partners First Quarter 2025 Earnings Conference Call, significant guidance was provided regarding the company's financial and operational outlook. Key metrics included a 13% increase in natural gas processing capacity with the commissioning of the North Loving plant, net leverage below three times, and approximately $2.4 billion in liquidity. The company reported a net income attributable to limited partners of $302 million, an adjusted EBITDA of $594 million, and a free cash flow of $399 million. Operationally, there was a 2% sequential decrease in natural gas throughput and a 6% decrease in crude oil and NGL throughput. Despite these declines, the company expects mid-single-digit percentage growth in natural gas and produced water throughput, and low single-digit growth in crude oil and NGLs for the year. The company maintains an investment-grade credit rating and plans to retire senior notes maturing in 2025. While maintaining its 2025 financial guidance ranges, the company acknowledged potential impacts from lower commodity prices but remains confident in its financial resilience and strategic positioning.Western Midstream Partners Corporate Events
Executive/Board Changes
Western Midstream Partners Announces Leadership Transition
Neutral
Feb 18, 2025
On February 18, 2025, Robert W. Bourne, Senior Vice President and Chief Commercial Officer of Western Midstream Holdings, LLC, entered into a Retirement Agreement with Western Midstream Partners, LP, under which he will transition to an advisory role until March 3, 2025, and then serve as a consultant for six months. The agreement outlines various retirement benefits, including pro rata bonuses, equity vesting, and participation in benefit plans, along with confidentiality and non-compete clauses, potentially impacting stakeholder interests and company operations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.