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Hess Midstream shares drop 23% after Chevron deal but may be undervalued due to unit reduction and steady payouts.

Market News
21 Oct 2026
24/7 Wall Street
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Bearish
Hess Midstream shares drop 23% after Chevron deal but may be undervalued due to unit reduction and steady payouts.

Hess Midstream's stock fell nearly 23% in a month following a deal announcement with Chevron, which includes a $200 million cash payment, asset acquisition, and a 40% reduction in shares outstanding. The deal lowers tariffs but extends contracts, leading to a forecasted EBITDA drop of about 27% in 2027. Despite the earnings decline, the per-share distribution is expected to remain flat with a yield around 10.4%, supported by fewer outstanding units. Investors should watch the upcoming earnings report and leverage levels to assess if the recent selloff is justified or overdone.

Chevron Corp (CVX) trades at USD 225.29 on Pluang as of Oct 21, 2026 20:01 WIB, close to its 52-week high of USD 225.71. The stock shows a slight 1-day decline of 0.19%, with a dividend yield of 3.15% and a market cap of $442.75 billion. This stable performance contrasts with Hess Midstream's recent 23% drop, highlighting differing investor reactions within the energy sector following major deal announcements.

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