J.P. Morgan Downgrades Hess Midstream Due to MVC Step-Down Risks
J.P. Morgan downgraded Hess Midstream (HESM) from Neutral to Underweight, equivalent to a Sell rating, with a $39 price target. The downgrade is attributed to structural uncertainties surrounding the company's material minimum volume commitments (MVCs), which are set to step-down in coming years and could reduce cash flows if not met by customers. The firm expressed concerns about Hess Midstream’s ability to maintain stable earnings amid these MVC reductions, particularly given an uncertain outlook for customer demand. The stock fell 0.8% on Friday following the downgrade as investors reacted negatively to the revised risk assessment.
Tickers: $HESM