Hess Midstream Reports Strong Q1, Raises FCF Guidance on Lower Capex & Multi-Year Tax Deferral, Boosts Dividend
Summary
Hess Midstream LP reported strong first-quarter results, including increased EPS and Adjusted Free Cash Flow, and significantly raised its full-year FCF guidance due to lower capital expenditures and a multi-year deferral of income tax payments, while also increasing its quarterly cash distribution.
Key Events
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Strong Q1 Financial Performance
Reported Q1 2026 net income attributable to Hess Midstream LP of $87.6 million, or $0.68 basic EPS, an increase from $0.65 in Q1 2025. Adjusted EBITDA rose to $299.8 million and Adjusted Free Cash Flow increased significantly to $237.0 million.
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Raised Full-Year Free Cash Flow Guidance
Increased full-year 2026 Adjusted Free Cash Flow guidance to $910 - $960 million, up from previous expectations, driven by lower capital expenditures and tax deferrals.
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Significant Multi-Year Income Tax Deferral
No longer expects to pay material income taxes in 2026 or until after 2028 due to recently issued Additional Interim Guidance Regarding the Application of the Corporate Alternative Minimum Tax, providing a substantial boost to future cash flow.
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Increased Quarterly Cash Distribution
Declared a quarterly cash distribution of $0.7792 per Class A share for Q1 2026, an increase of $0.0151 per share compared to Q4 2025, supported by accretive share repurchases.
Analysis
Hess Midstream LP delivered a strong first quarter, exceeding prior-year EPS and Adjusted EBITDA. The company significantly increased its full-year 2026 Adjusted Free Cash Flow guidance to $910-$960 million, primarily driven by a substantial reduction in capital expenditures and a critical update regarding income taxes. Hess Midstream now expects no material income tax payments until after 2028 due to new corporate alternative minimum tax guidance, which will free up significant cash flow for shareholder returns and debt repayment over the next several years. This positive financial outlook is further reinforced by an increased quarterly cash distribution and the completion of $60 million in share repurchases, signaling robust financial health and a commitment to shareholder value.
At the time of this filing, HESM was trading at $38.43 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $7.9B. The 52-week trading range was $31.63 to $44.14. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.