Hess Midstream (HESM) Cut to Underweight by Morgan Stanley on Risk-Reward Concerns

With an annual dividend yield of 8.17%, Hess Midstream LP (NYSE:HESM) is included among the 12 Stocks with Highest Dividend to Invest In Now.

On June 10, Morgan Stanley downgraded Hess Midstream LP (NYSE:HESM) to Underweight from Equal Weight. It set a $38 price target on the stock. The analyst said limited visibility into the company’s long-term growth prospects and sponsor strategy is “likely to constrain upside.” The firm also sees overhang risk and “a more negatively skewed risk/reward.”

During the first-quarter 2026 earnings call, Chief Executive Officer Jonathan Stein said the company completed a $60 million share and unit repurchase in March. He described the transaction as accretive and noted that it involved both public investors and the company’s sponsor. Stein also said Hess Midstream increased its distribution for Class A shares by 2% the previous week. According to him, that represents an annualized increase of about 8%.

On the operational side, Stein reported average throughput volumes of 430 million cubic feet per day for gas processing, 119,000 barrels per day for crude terminaling, and 115,000 barrels per day for water gathering during the quarter.

Looking ahead, Stein said the company remains on track to meet its annual guidance and continues to expect volume growth through the rest of the year. He added that planned maintenance at TGP in the second quarter is expected to temporarily reduce volumes by 5 million to 10 million cubic feet per day during the period.

Hess Midstream LP (NYSE:HESM) is a midstream company that owns, operates, develops, and acquires a diverse portfolio of midstream assets. The company provides services to Hess as well as third-party customers.

READ NEXT: Top 10 Income Stocks with the Highest Upside Potential and Billionaire Larry Robbins’ 10 Dividend Stock Picks

Disclosure: None. Follow Insider Monkey on Google News.