With a market cap of $38.9 billion, Hess Corporation (HES) operates in the energy sector, focusing on exploration and production. The New York-based company engages in crude oil and natural gas exploration, development, production, and midstream operations across key regions.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Hess fits this criterion perfectly, exceeding the mark. Hess' uniqueness in the market lies in its strong focus on high-impact offshore projects, particularly in Guyana, and its strategic midstream infrastructure, which enhances its operational efficiency and value chain integration.
However, the oil and gas producer has fallen 23.9% from its 52-week high of $167.75, achieved in October last year. Shares of HES have dipped 12.5% over the past three months, which is more pronounced than The Energy Select Sector SPDR Fund’s (XLE) 4.9% decline over the same time frame.
Longer term, HES is down 11.5% on a YTD basis, lagging behind XLE’s 1.5% gain. Moreover, shares of Hess have declined 20.8% over the past 52 weeks, compared to XLE’s 8.5% loss over the same time frame.
To confirm the bearish price trend, HES has been trading below its 50-day and 200-day moving averages since August.
Hess has underperformed over the past year due to delays in the Chevron acquisition, increased reliance on volatile oil prices, and investor concerns over potential political risks in Guyana. However, the stock rose over 1.1% on Jul. 31 due to better-than-expected Q2 earnings results, with an adjusted profit of $2.62 per share and revenue of $3.3 billion. This increase was driven by a 75% year-over-year production surge in Guyana and higher realized crude oil prices, averaging $80.29 per barrel, which boosted overall performance.
To emphasize the stock’s underperformance, its rival Marathon Oil Corporation (MRO) has declined 4.2% over the past 52 weeks and is up 7.5% on a YTD basis, outperforming HES stock.
Despite the stock’s weak price action, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 16 analysts covering the stock, and the mean price target of $165.43 represents a premium of 29.6% to current 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.
