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Western Midstream Partners
(NYSE:WES)
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Rating:78Outperform
Price Target:
$51.00
â–²(6.38% Upside)
Action:Reiterated
Date:09/07/26
WES scores well primarily due to strong profitability and exceptional free-cash-flow generation, supporting distributions, alongside a constructive technical trend (price above major moving averages with positive MACD). Valuation is helped by a high dividend yield, while the biggest constraint on the score is balance-sheet leverage and the added financing complexity around the recent acquisition and note issuance.
Positive Factors
Exceptional cash generation
WES converts its operations into substantial cash, with free cash flow representing about 70% of net income. This supports distributions, debt service, and internally funded investment, giving the partnership resilience and flexibility over the next several quarters.
Negative Factors
Elevated leverage
Debt materially exceeds equity, which reduces financial flexibility and can increase refinancing and interest burdens. Although cash generation is strong, elevated leverage may constrain capital allocation and make WES more vulnerable to weaker volumes or adverse operating conditions.
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Positive Factors
Negative Factors
Exceptional cash generation
WES converts its operations into substantial cash, with free cash flow representing about 70% of net income. This supports distributions, debt service, and internally funded investment, giving the partnership resilience and flexibility over the next several quarters.
Read all positive factors
Western Midstream Partners Key Performance Indicators (KPIs)
Western Midstream Partners (WES) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.42B
Dividend Yield8.25%
Average Volume (3M)996.86K
Price to Earnings (P/E)13.9
Beta (1Y)0.24
Revenue Growth18.00%
EPS Growth-2.36%
CountryUS
Employees1,704
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)3.21
Shares Outstanding413,174,600
10 Day Avg. Volume1,193,754
30 Day Avg. Volume996,862
Financial Highlights & Ratios
PEG Ratio-0.51
Price to Book (P/B)3.93
Price to Sales (P/S)4.12
P/FCF Ratio10.80
Enterprise Value/Market Cap1.45
Enterprise Value/Revenue6.15
Enterprise Value/Gross Profit9.25
Enterprise Value/Ebitda11.55
Forecast
1Y Price Target
$48.78Price Target Upside1.75% Upside
Rating ConsensusHold
Number of Analyst Covering9
EPS Forecast (FY)3.73
Revenue Forecast (FY)$4.71B
Western Midstream Partners Business Overview & Revenue Model
Company Description
Western Midstream Partners, LP, an energy infrastructure company operating with its subsidiaries, primarily acquires, owns, develops, and manages assets across the United States. Its core functions include the collection, compression, treatment, p...
How the Company Makes Money
WES makes money by charging fees under long-term commercial contracts for midstream services tied to volumes of hydrocarbons and produced water handled through its systems. Its revenue is primarily generated from: (1) Natural gas gathering and pro...
Western Midstream Partners Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The earnings call was predominantly positive: management reported record adjusted EBITDA, record throughput in key product lines, solid distributable cash flow and declared an accretive $1.6 billion Brazos Delaware acquisition that meaningfully expands Delaware Basin scale and processing capacity. Strong liquidity, disciplined leverage (pro forma ~3x) and ongoing cost reductions underpin confidence in achieving guidance toward the high end. Near-term headwinds include Waha price-driven curtailments, localized basin declines (Powder River), a QoQ operating cash flow decline tied to a contract renegotiation with Occidental and some supply-chain/turnaround timing risks. Overall, the positives (record results, accretive M&A, strong balance sheet, updated guidance) outweigh the localized operational and commodity-linked challenges.Positive Updates
Record Adjusted EBITDA and Strong Quarterly Financials
Reported record adjusted EBITDA of $683 million, up 7% sequentially and 15% year-over-year. Net income attributable to limited partners was $342 million and distributable cash flow amounted to $509 million for Q1 2026.
Negative Updates
Waha Natural Gas Pricing Weakness and Curtailments
Stubbornly low and sometimes negative Waha natural gas pricing led to customer curtailments in the Delaware Basin that depressed volumes; management expects these curtailments and Waha price volatility to persist through Q2 while downstream maintenance and constrained takeaway capacity resolve (takeaway capacity additions expected Q3–Q4).
Read all updates
Q1-2026 Updates
Positive
Negative
Record Adjusted EBITDA and Strong Quarterly Financials
Reported record adjusted EBITDA of $683 million, up 7% sequentially and 15% year-over-year. Net income attributable to limited partners was $342 million and distributable cash flow amounted to $509 million for Q1 2026.
Read all positive updates
Company Guidance
Western said it now expects to be toward the high end of its 2026 guidance ranges: adjusted EBITDA $2.5–$2.7 billion (toward the high end) and distributable cash flow $1.85–$2.05 billion (toward the high end), with free cash flow of $900M–$1.1B and 2026 capex of $850M–$1.0B (about half for Pathfinder and North Loving II). Management reiterated average adjusted gross margins of ~ $1.28/Mcf (gas), $3.10–$3.15/barrel (crude & NGLs) and ~ $0.91/barrel (produced water; Q2 ≈ $0.93), and throughput guidance of portfolio gas relatively flat YoY (Delaware gas up low‑ to mid‑single digits), crude/NGLs now roughly flat for crude in 2026 (previously low‑ to mid‑single‑digit decline), and produced water up ~80% YoY. Q1 results supporting the outlook: record adjusted EBITDA $683M (+7% sequential, +15% YoY), DCF $509M, net income to LPs $342M, cash from ops $470M, free cash flow $242M, Q1 throughput ~2.0+ Bcf/d gas (Delaware), 272,000 bpd crude/NGLs and ~2.8M bpd produced water. Balance‑sheet and transaction metrics: liquidity > $2.5B, trailing 12‑month net leverage ≈3.1x and pro‑forma net leverage ≈3.0x post‑Brazos; Brazos Delaware is a $1.6B deal ($800M cash/$800M WES units) expected to add ~ $100M incremental adjusted EBITDA in 2026, expand West Texas dedicated acreage ~49% (to ~470k acres), add ~900 miles of pipe and ~460 MMcf/d processing capacity (with ~125 MMcf/d spare at Comanche), ~3,500 drilling locations at $65/bbl, weighted‑average contract life ~9.2 years, and a ~8x 2027 EBITDA valuation (≈7.5x with commercialization/synergies). Distribution: quarterly $0.93/unit (2.2% qtrly increase), annualized $3.72, and a full‑year target of at least $3.70 per unit.Western Midstream Partners Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
62
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.33B | 3.84B | 3.61B | 3.11B | 3.25B | 2.88B |
| Gross Profit | 2.88B | 2.63B | 2.78B | 2.34B | 2.25B | 2.00B |
| EBITDA | 2.31B | 2.30B | 2.64B | 1.99B | 2.16B | 1.85B |
| Net Income | 1.26B | 1.17B | 1.57B | 1.02B | 1.22B | 916.29M |
Balance Sheet | ||||||
| Total Assets | 16.32B | 15.00B | 13.14B | 12.47B | 11.27B | 11.27B |
| Cash, Cash Equivalents and Short-Term Investments | 104.77M | 819.49M | 1.09B | 272.79M | 286.66M | 202.00M |
| Total Debt | 9.13B | 8.93B | 8.14B | 7.96B | 6.83B | 6.95B |
| Total Liabilities | 11.92B | 10.84B | 9.77B | 9.44B | 8.16B | 8.18B |
| Stockholders Equity | 4.26B | 4.02B | 3.24B | 2.90B | 2.97B | 2.96B |
Cash Flow | ||||||
| Free Cash Flow | 2.25B | 1.46B | 1.27B | 913.12M | 1.21B | 1.45B |
| Operating Cash Flow | 2.15B | 2.19B | 2.11B | 1.65B | 1.70B | 1.77B |
| Investing Cash Flow | -2.13B | -1.09B | -39.17M | -1.61B | -218.24M | -257.54M |
| Financing Cash Flow | -44.80M | -1.38B | -1.25B | -58.83M | -1.40B | -1.75B |
Western Midstream Partners Technical Analysis
Negative
47.94
Price Trends
46.95
Negative
45.66
Negative
42.98
Positive
Market Momentum
-0.61
Positive
40.15
Neutral
19.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WES, the sentiment is Negative. The current price of 47.94 is above the 20-day moving average (MA) of 45.05, above the 50-day MA of 46.95, and above the 200-day MA of 42.98, indicating a neutral trend. The MACD of -0.61 indicates Positive momentum. The RSI at 40.15 is Neutral, neither overbought nor oversold. The STOCH value of 19.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WES.
Western Midstream Partners Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $18.42B | 13.89 | 34.12% | 8.25% | 18.00% | -2.36% | |
74 Outperform | $9.85B | 24.70 | 20.19% | 4.34% | 7.19% | -11.58% | |
69 Neutral | $8.85B | 19.96 | -36.70% | 5.76% | 10.46% | 281.46% | |
69 Neutral | $12.70B | 27.06 | 9.87% | 2.78% | 18.12% | 22.38% | |
68 Neutral | $6.32B | 10.71 | 69.02% | 9.94% | 2.78% | 7.61% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $611.88M | -27.85 | -0.48% | 40.11% | 20.94% | 95.10% |
* Energy Sector Average
WES
Western Midstream Partners
44.58
8.89
24.92%
SMC
Summit Midstream
30.64
8.72
39.78%
AM
Antero Midstream
20.75
3.49
20.19%
HESM
Hess Midstream Partners
31.07
0.06
0.20%
KNTK
Kinetik
55.69
17.95
47.57%
DTM
DT Midstream
124.48
21.27
20.60%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.