Raymond James has downgraded Hess Midstream LP (NYSE:HESM) from Outperform to Market Perform, without setting a new price target. The firm made this adjustment as part of a broader reshuffling of ratings across the midstream supplier group ahead of 2026.
In its assessment, Raymond James noted that while the overall midstream backdrop remains supportive, investor expectations have changed. The focus is now less on riding industry tailwinds and more on execution, specifically which companies can turn favorable conditions into dependable, repeatable cash flow.
Hess Midstream LP’s latest quarterly results, for Q3 2025, showed a fairly steady operating picture. The company reported net income of $176 million, slightly below the $180 million posted in Q2. Adjusted EBITDA moved higher, rising to $321 million from $316 million in the prior quarter.
Margins remained a key strength, with the company’s gross adjusted EBITDA margin holding near 80%, well above its 75% target. This margin performance points to strong operating leverage and cost discipline, even as results fluctuate modestly from quarter to quarter.
On the distribution side, Hess Midstream continued delivering on its payout framework. The third-quarter distribution included the targeted 5% annual growth per Class A share. It also included an additional lift tied to the company’s $100 million share repurchase, which can support per-share metrics over time.
Hess Midstream LP (NYSE:HESM) provides midstream services such as gathering, processing, storage, and transportation for crude oil, natural gas, and natural gas liquids. The company is included among the 13 Best Dividend Stocks Paying Over 6%.