New York-based Hess Corporation (HES), with a market cap of $40.4 billion, is a leading energy company focused on the exploration, production, and transportation of crude oil, natural gas, and natural gas liquids. The company provides comprehensive upstream and midstream services within the energy sector.
Shares of this oil and gas producer have underperformed the broader market over the past 52 weeks. HES has dipped 13.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 15.1%. In 2024, Hess' stock is down 9.1%, compared to SPX’s 9% rise on a YTD basis.
Zooming in further, Hess's stock has seen a pronounced decline compared to the US Oil & Gas Explor & Prod iShares ETF’s (IEO) 3.1% loss over the past 52 weeks and marginal declines on a YTD basis.
Hess Corporation has underperformed over the past year due to weaker-than-expected refining results and lower natural gas realizations. Moreover, the stock dropped almost 8% on Aug. 1 due to the extended delay in Chevron's $53 billion acquisition of Hess, caused by arbitration over Exxon Mobil's claim to a right of first refusal on Hess' Guyana stake. This uncertainty about the merger's timing negatively impacted investor sentiment.
For the current fiscal year, ending in December, analysts expect HES' EPS to grow 119.4% year over year to $11.08. The company's earnings surprise history is promising. It beat the consensus estimates in all of the last four quarters. HES posted an EPS of $2.62 in Q2 2024, surpassing the consensus estimate by 5.7%, driven by increased production volumes and higher commodity prices.
Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy.” That is based on six “Strong Buy” ratings and 11 “Holds.”
The configuration is more bullish than three months ago, with four “Strong Buy” ratings on the stock.
On Aug. 5, Jefferies analyst Lloyd Byrne maintained a “Hold” rating on Hess with a price target of $157. This new target implies a potential upside of 19.7% from the current price levels.
The mean price target of $169.64 represents a premium of 29.4% to HES' current levels. The street-high price target of $210 indicates a potential upside of 60.2% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
