Last week saw the newest quarterly earnings release from Hess Midstream LP (NYSE:HESM), an important milestone in the company's journey to build a stronger business. It looks like the results were a bit of a negative overall. While revenues of US$356m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.1% to hit US$0.59 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Hess Midstream's six analysts is for revenues of US$1.50b in 2024. This reflects a modest 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 43% to US$2.55. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.52b and earnings per share (EPS) of US$2.66 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$37.80, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Hess Midstream at US$38.00 per share, while the most bearish prices it at US$37.00. This is a very narrow spread of estimates, implying either that Hess Midstream is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Hess Midstream'shistorical trends, as the 9.3% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.3% annually. So it's pretty clear that Hess Midstream is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hess Midstream. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$37.80, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hess Midstream going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Hess Midstream you should be aware of, and 1 of them can't be ignored.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.