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Relative valuation derived from Utilities sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
31.5%
Sector: 9.9%
Dividend Analysis audit
HIGH YIELD
9.31%
Trailing Yield
$9.31
Per $100 Invested
Attractive yield supported by strong profitability.
Est. Payout Ratio
115%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Western Midstream Partners, LP (WES) receives a "Hold" rating with a composite score of 50.5/100, ranked #1032 out of 4446 stocks. Key factor scores: Quality 50/100, Value 72/100, Momentum 45/100. This is quantitative analysis only — not investment advice.
Western Midstream Partners, LP (WES) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Western Midstream Partners, LP Do?
Western Midstream Partners, LP, a midstream energy company, together with its subsidiaries, acquires, owns, develops, and operates primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. It also buys and sells natural gas, NGLs, and condensate. The company operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas. Western Midstream Partners, LP (WES) is classified as a large-cap stock in the Utilities sector. The company is led by CEO Michael P. Ure and employs approximately 1,220 people, headquartered in THE WOODLANDS, Texas. With a market capitalization of $16.0B, WES is one of the prominent companies in the Utilities sector.
Western Midstream Partners, LP (WES) Stock Rating — Hold (April 2026)
As of April 2026, Western Midstream Partners, LP receives a Hold rating with a composite score of 50.5/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.WES ranks #1,032 out of 4,446 stocks in our coverage universe. Within the Utilities sector, Western Midstream Partners, LP ranks #71 of 112 stocks, placing it in the lower half of its Utilities peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
WES Stock Price and 52-Week Range
Western Midstream Partners, LP (WES) currently trades at $41.08. The stock gained $0.14 (0.3%) in the most recent trading session. The 52-week high for WES is $44.74, which means the stock is currently trading -8.2% from its annual peak. The 52-week low is $33.60, putting the stock 22.3% above its annual trough. Recent trading volume was 603K shares, suggesting relatively thin trading activity.
Is WES Overvalued or Undervalued? — Valuation Analysis
Western Midstream Partners, LP (WES) carries a value factor score of 72/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 12.39x, compared to the Utilities sector average of 23.47x — a discount of 47%. The price-to-book ratio stands at 3.90x, versus the sector average of 1.98x. The price-to-sales ratio is 4.40x, compared to 0.82x for the average Utilities stock. On an enterprise value basis, WES trades at 9.61x EV/EBITDA, versus 4.75x for the sector.
Based on these multiples, Western Midstream Partners, LP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
Western Midstream Partners, LP Profitability — ROE, Margins, and Quality Score
Western Midstream Partners, LP (WES) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 31.5%, compared to the Utilities sector average of 9.9%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 8.8% versus the sector average of 3.1%.
On a margin basis, Western Midstream Partners, LP reports gross margins of 95.0%, compared to 53.1% for the sector. The operating margin is 45.8% (sector: 21.5%). Net profit margin stands at 35.5%, versus 12.8% for the average Utilities stock. Revenue growth is running at 5.2% on a trailing basis, compared to 20.1% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
WES Debt, Balance Sheet, and Financial Health
Western Midstream Partners, LP has a debt-to-equity ratio of 260.0%, compared to the Utilities sector average of 164.5%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.34x, suggesting adequate working capital coverage. Total debt on the balance sheet is $6.94B. Cash and equivalents stand at $177M.
WES has a beta of 0.50, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Western Midstream Partners, LP is 88/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
Western Midstream Partners, LP Revenue and Earnings History — Quarterly Trend
In TTM 2026, Western Midstream Partners, LP reported revenue of $3.70B. Net income for the quarter was $1.31B. Gross margin was 95.0%. Operating income came in at $1.69B.
In FY 2025, Western Midstream Partners, LP reported revenue of $3.84B. Net income for the quarter was $1.21B. Revenue grew 6.6% year-over-year compared to FY 2024. Operating income came in at $1.60B.
In Q3 2025, Western Midstream Partners, LP reported revenue of $952M. Net income for the quarter was $349M. Revenue grew 7.8% year-over-year compared to Q3 2024. Operating income came in at $442M.
In Q2 2025, Western Midstream Partners, LP reported revenue of $942M. Net income for the quarter was $351M. Revenue grew 4.1% year-over-year compared to Q2 2024. Operating income came in at $444M.
Over the past 8 quarters, Western Midstream Partners, LP has demonstrated a growth trajectory, with revenue expanding from $906M to $3.70B. Investors analyzing WES stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
WES Dividend Yield and Income Analysis
Western Midstream Partners, LP (WES) currently pays a dividend yield of 9.3%. At this yield, a $10,000 investment in WES stock would generate approximately $$931.00 in annual dividend income. This compares to the Utilities sector average dividend yield of 2.8%, meaning WES offers above-average income for its sector. With a net margin of 35.5%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
WES Momentum and Technical Analysis Profile
Western Midstream Partners, LP (WES) has a momentum factor score of 45/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 31/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 15/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
WES vs Competitors — Utilities Sector Ranking and Peer Comparison
Comparing WES against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full WES vs S&P 500 (SPY) comparison to assess how Western Midstream Partners, LP stacks up against the broader market across all factor dimensions.
WES Next Earnings Date
No upcoming earnings date has been announced for Western Midstream Partners, LP (WES) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy WES? — Investment Thesis Summary
Western Midstream Partners, LP presents a balanced picture with arguments on both sides. The value score of 72/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 88/100) reduces downside risk.
In summary, Western Midstream Partners, LP (WES) earns a Hold rating with a composite score of 50.5/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on WES stock.
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Institutional Research Dossier
Western Midstream Partners, LP (WES) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Western Midstream Partners, LP (WES) currently holds a Hold rating, driven by a balanced assessment of its strong profitability and stability against concerns regarding its capital allocation and growth prospects. While WES exhibits attractive valuation multiples and robust margins compared to its sector, its relatively high debt levels and lower revenue growth warrant caution. The partnership's strategic positioning in key shale basins provides a degree of resilience, but its future performance hinges on efficient capital deployment and navigating the evolving energy landscape.
The core takeaway is that WES presents a mixed bag for investors. Its operational efficiency and financial stability offer downside protection, while its valuation suggests potential upside. However, the partnership's growth trajectory and capital allocation decisions remain key determinants of its long-term success. Investors should closely monitor WES's ability to generate sustainable free cash flow, manage its debt burden, and capitalize on growth opportunities in the midstream sector.
Business Strategy & Overview
Western Midstream Partners operates as a midstream energy company, focusing on gathering, processing, and transporting natural gas, NGLs, crude oil, and produced water. Its revenue is primarily derived from fee-based contracts with producers, providing a relatively stable income stream. The company's assets are strategically located in key shale basins, including the Delaware Basin, DJ Basin, and North-central Pennsylvania, allowing it to capitalize on production growth in these regions. WES's business model centers around providing essential midstream services to producers, enabling them to efficiently transport their products to market.
The partnership's strategy involves expanding its infrastructure footprint through organic growth projects and strategic acquisitions. These investments aim to increase its processing capacity, pipeline network, and storage facilities, thereby enhancing its ability to serve producers and capture a larger share of the midstream market. WES also focuses on optimizing its existing assets to improve operational efficiency and reduce costs. This includes implementing advanced technologies and streamlining its processes to enhance its competitiveness.
A key aspect of WES's strategy is its commitment to maintaining a strong balance sheet and generating sustainable free cash flow. The partnership aims to deleverage its balance sheet by reducing its debt burden and improving its credit metrics. It also prioritizes returning capital to its unitholders through distributions and potential unit repurchases. This disciplined approach to capital allocation is intended to enhance long-term value for its investors.
The midstream sector is characterized by intense competition, with numerous players vying for market share. WES competes with other midstream companies, as well as integrated energy companies that have their own midstream operations. The partnership's ability to differentiate itself through superior service, strategic asset positioning, and cost efficiency is crucial to its success. Furthermore, WES must navigate the evolving regulatory landscape and address environmental concerns related to its operations.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
5.2%
Sector: 20.1%
-74% VS SCTR
Economic Moat Analysis
Western Midstream Partners possesses a Narrow economic moat, primarily stemming from its efficient scale and, to a lesser extent, its strategic asset locations. The midstream industry, particularly in gathering and processing, often exhibits characteristics of efficient scale, where a limited number of operators can efficiently serve a specific geographic area. Building redundant infrastructure is often economically unfeasible, granting established players like WES a competitive advantage within their operational footprint.
The partnership's assets are strategically located in key shale basins, providing access to prolific production areas. This proximity to producers reduces transportation costs and enhances its ability to secure long-term contracts. However, the sustainability of this advantage depends on the continued production activity in these basins and the absence of significant new infrastructure development by competitors.
While WES benefits from its asset locations and efficient scale, it faces competition from other midstream operators and integrated energy companies. The partnership's ability to maintain its competitive advantage hinges on its operational efficiency, cost structure, and ability to provide reliable services to its customers. Furthermore, the evolving energy landscape and the increasing focus on renewable energy sources pose a potential threat to the long-term viability of its moat.
The absence of strong switching costs for producers also limits the strength of WES's moat. While producers may prefer to maintain relationships with established midstream providers, they can switch to alternative operators if they offer more favorable terms or better service. This lack of customer stickiness reduces the partnership's pricing power and increases its vulnerability to competition.
Intangible assets, such as brand recognition or proprietary technology, do not play a significant role in WES's competitive advantage. The partnership's success is primarily driven by its operational expertise and its ability to efficiently manage its assets. Therefore, its moat is primarily based on its efficient scale and strategic asset locations, which provide a moderate degree of competitive protection.
Financial Health & Profitability
Western Midstream Partners exhibits a mixed financial profile. The company's revenue has shown moderate growth, increasing from $3.11 billion in FY2023 to $3.84 billion in FY2025. However, the sector has seen a revenue growth of 20.1% compared to WES's 5.2%. This suggests that WES is not capturing as much growth as its peers. Net income has fluctuated, reaching $1.61 billion in FY2024 before declining to $1.21 billion in FY2025. The operating margin has also varied, ranging from 39.5% to 76.5% across the quarters, indicating some volatility in profitability.
WES demonstrates strong profitability metrics compared to its sector. Its gross margin of 95.0% significantly exceeds the sector average of 53.3%, while its operating margin of 45.8% is more than double the sector average of 21.7%. The net margin of 35.5% is also substantially higher than the sector average of 12.8%. These figures highlight WES's operational efficiency and ability to generate profits from its midstream operations.
The partnership's balance sheet reveals a relatively high level of debt. With total debt of $6.94 billion and total cash of $177.29 million, WES's debt-to-equity ratio stands at 260.00, which is higher than the sector average of 165.00. While the current ratio of 1.34 indicates sufficient liquidity to meet short-term obligations, the high debt burden raises concerns about financial leverage and potential vulnerability to interest rate fluctuations. The company's free cash flow generation of $515.70 million provides some cushion, but managing the debt remains a key priority.
ROE is a strong point for WES, coming in at 31.5% compared to the sector average of 10.0%. This indicates that WES is efficiently using equity to generate profits. However, the high debt levels contribute to this higher ROE, so it's important to consider the leverage involved.
Overall, WES's financial health presents a mixed picture. The partnership's strong profitability and cash flow generation are offset by its relatively high debt levels and lower revenue growth compared to the sector. Managing the debt burden and improving revenue growth will be crucial for sustaining long-term financial stability and enhancing shareholder value.
Valuation Assessment
Western Midstream Partners' valuation appears attractive based on several key metrics. The company's P/E ratio of 12.5x is significantly lower than the sector average of 22.7x, suggesting that the stock may be undervalued relative to its earnings. Similarly, its EV/EBITDA multiple of 2.6x is substantially below the sector average of 4.8x, further indicating a potential undervaluation. These multiples suggest that investors may be undervaluing WES's earnings and cash flow generation capabilities.
However, it's important to consider WES's growth prospects when assessing its valuation. The company's revenue growth of 5.2% is lower than the sector average of 20.1%, which may justify a lower valuation multiple. Investors may be discounting the stock due to concerns about its ability to generate significant revenue growth in the future. Therefore, the valuation should be considered in the context of its growth potential.
The free cash flow yield, while not explicitly provided, can be inferred from the free cash flow of $515.70 million and the market capitalization of $16.40 billion. This implies a FCF yield of approximately 3.14%. This yield is reasonable, but not exceptionally high, suggesting that the stock is not deeply undervalued based on its free cash flow generation.
Compared to its historical valuation, WES's current multiples appear to be within a reasonable range. However, it's important to consider the changes in the company's business strategy, financial performance, and the overall market environment when making historical comparisons. The partnership's efforts to deleverage its balance sheet and improve its operational efficiency may warrant a higher valuation multiple in the future.
Overall, WES's valuation appears to be fair to slightly undervalued, considering its strong profitability, stable cash flow generation, and relatively low valuation multiples. However, the lower revenue growth and high debt levels warrant caution. Investors should closely monitor the company's ability to improve its growth prospects and manage its debt burden to determine whether the stock is truly undervalued.
Risk & Uncertainty
Western Midstream Partners faces several key risks and uncertainties that could impact its financial performance and valuation. One of the primary risks is related to commodity price volatility. While WES primarily operates under fee-based contracts, its revenue is indirectly affected by commodity prices, as lower prices can lead to reduced production activity and lower volumes through its pipelines and processing facilities. A sustained decline in commodity prices could negatively impact WES's revenue and cash flow.
Regulatory risks also pose a significant threat to WES's business. The midstream sector is subject to extensive regulations related to environmental protection, safety, and transportation. Changes in these regulations could increase compliance costs and restrict the partnership's operations. Furthermore, potential changes in tax laws could also impact WES's profitability and cash flow.
Competition from other midstream operators and integrated energy companies is another key risk. The midstream sector is highly competitive, with numerous players vying for market share. WES faces competition from established midstream companies, as well as integrated energy companies that have their own midstream operations. Increased competition could lead to lower prices and reduced market share for WES.
The partnership's high debt levels also pose a significant risk. WES has a relatively high debt-to-equity ratio, which increases its vulnerability to interest rate fluctuations and economic downturns. A rise in interest rates could increase the partnership's borrowing costs and reduce its profitability. Furthermore, an economic downturn could lead to reduced demand for midstream services and negatively impact WES's revenue and cash flow.
Finally, concentration risk is a factor. If WES relies heavily on a small number of customers or assets, any disruption to those relationships or assets could have a material adverse effect on its business. Diversification of customer base and asset portfolio is crucial to mitigating this risk.
Bulls Say / Bears Say
The Bull Case
BULL VIEWWES's strategic asset positioning in key shale basins and its efficient operations will drive stable cash flow generation, supporting attractive distributions to unitholders.
BULL VIEWThe partnership's commitment to deleveraging its balance sheet and improving its credit metrics will enhance its financial flexibility and reduce its risk profile, leading to a higher valuation.
BULL VIEWWES's strong profitability metrics, including its high gross and operating margins, demonstrate its competitive advantage and ability to generate superior returns compared to its peers.
The Bear Case
BEAR VIEWWES's high debt levels and relatively low revenue growth compared to the sector will limit its ability to generate significant shareholder value and expose it to financial distress in a downturn.
BEAR VIEWThe partnership's reliance on fee-based contracts does not fully insulate it from commodity price volatility, as lower prices can lead to reduced production activity and lower volumes through its pipelines.
BEAR VIEWIncreased competition from other midstream operators and integrated energy companies will erode WES's market share and pricing power, leading to lower profitability and reduced cash flow.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score WES and 4,400+ other equities.
Western Midstream Partners, LP exhibits a 146% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
8.8%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
95.0%
Sector: 53.1%
Operating Margin
Core business profitability
45.8%
Sector: 21.5%
Net Margin
Bottom-line profitability
35.5%
Sector: 12.8%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.83%
Yield Delta+229%
Income Projection audit
A $10,000 investment would generate approximately $931 annually in dividends at the current trailing rate.
