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Western Midstream Partners (WES): Evaluating Valuation After Aris Water Deal and Expansion of Water, Pipeline Assets

Simply Wall St · 2d ago

Western Midstream Partners (WES) just doubled down on its produced water and pipeline strategy, closing the Aris Water Solutions acquisition and advancing projects like Pathfinder, moves that help support its high, well covered distribution.

See our latest analysis for Western Midstream Partners.

Despite the busy deal calendar, Western Midstream Partners share price has been relatively steady around $39.54. Its 1 year total shareholder return of roughly 11 percent and exceptional 5 year total shareholder return north of 300 percent suggest steadily building momentum behind the high yield story.

If Western Midstream’s steady climb and income profile appeal to you, this could be a good moment to broaden your search and explore fast growing stocks with high insider ownership.

With leverage low, growth projects lining up, and units still trading below some fair value estimates, investors face a familiar dilemma: is Western Midstream quietly undervalued, or are markets already pricing in years of future growth?

Most Popular Narrative Narrative: 6% Undervalued

With the most followed fair value near 41.83 dollars against a 39.54 dollar close, this framework leans toward modest upside for Western Midstream.

Investment in major long term capacity expansions, such as the Pathfinder pipeline and North Loving II plant, are set to come online in 2027, adding significant processing and transport capability, and expected to materially increase revenues and cash flows in subsequent years. Continued focus on cost optimization and operational efficiencies are helping contain OpEx even as volumes grow, providing the potential for margin expansion and higher net earnings as new projects ramp up.

Read the complete narrative.

Curious how these big ticket projects translate into higher earnings and a richer profit multiple, all while using a sub 10 percent discount rate? Dig into the full narrative to see the specific revenue ramps, margin shifts, and valuation math behind that fair value call.

Result: Fair Value of $41.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the outlook could crack if drilling slows or if major projects like Pathfinder and North Loving II face delays, cost overruns, or regulatory setbacks.

Find out about the key risks to this Western Midstream Partners narrative.

Build Your Own Western Midstream Partners Narrative

If you have a different view or simply want to test your own assumptions against the numbers, you can build a custom Western Midstream story in under three minutes, Do it your way.

A great starting point for your Western Midstream Partners research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.