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Western Midstream (WES) Down 0.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Western Midstream (WES - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Western Midstream due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Western Midstream Partners, LP before we dive into how investors and analysts have reacted as of late.
Q4 Earnings & Revenue Performance
In the fourth quarter of 2025, total revenues and other income rose to $1.03 billion, up from $928.5 million in the year-ago quarter, representing an increase of roughly 11%.
For the full year, revenues climbed to $3.84 billion from $3.61 billion in 2024. Fourth-quarter net income attributable to limited partners totaled $187.2 million, or $0.47 per diluted common unit, compared with $325.9 million, or $0.85 per diluted unit, in the fourth quarter of 2024. The year-over-year decline in quarterly earnings reflects higher operating and transaction-related costs, including those associated with the Aris acquisition, as well as certain non-cash revenue adjustments.
Other Key Business Metrics
Quarterly operating data pointed to mixed trends across commodities. In the fourth quarter, natural-gas throughput averaged 5,162 MMcf/d, slightly below the prior quarter’s 5,358 MMcf/d, while crude-oil and NGLs volumes were largely steady at 508 MBbls/d. Produced-water throughput, however, jumped to 2,693 MBbls/d from 1,217 MBbls/d in the third quarter, reflecting the integration of Aris and continued basin activity.
Margins were relatively stable for natural gas at $1.26 per Mcf in the fourth quarter versus $1.27 in the third, while crude-oil and NGL margins narrowed to $2.77 per barrel from $3.10. Produced-water margins also eased sequentially to $0.83 per barrel from $0.94.
Cash flow remained solid. Fourth-quarter operating cash flow totaled $557.6 million, down modestly from $570.2 million in the third quarter, while free cash flow came in at $340.8 million. Cash capital investments rose to $216.8 million from $172.8 million in the prior quarter, reflecting expansion activity.
Management Commentary and Strategic Priorities
Management emphasized efficiency improvements and cost control alongside growth. The company reduced fourth-quarter operation and maintenance expenses by 12% compared with the prior-year period and highlighted more than $100 million in annualized O&M savings from the first to the fourth quarter of 2025.
Strategically, Western Midstream is prioritizing expansion projects and disciplined capital allocation. Net leverage stood at 3.18x as of Dec. 31, 2025, and management reiterated a focus on executing organic growth projects, pursuing accretive M&A and targeting mid-to-low single-digit annual distribution growth.
Factors Influencing Headline Results
A key driver of 2025 performance was the acquisition of Aris Water Solutions, which significantly expanded the partnership’s produced-water footprint. The transaction enhanced recycling and disposal capacity and supported a 40% year-over-year increase in produced-water throughput.
Additionally, the partnership continued to advance the Pathfinder Pipeline, a produced-water transportation project expected to enter service in the first quarter of 2027. The pipeline is designed to handle more than 800 MBbls/d initially and is supported by firm commitments from Occidental, providing longer-term visibility into water-handling volumes.
Guidance
For 2026, Western Midstream projects Adjusted EBITDA between $2.5 billion and $2.7 billion, implying continued growth from 2025 levels. Total capital expenditures are expected to range from $850 million to $1.0 billion, with 76% allocated to expansion projects. The partnership also forecasts distributable cash flow of $1.85 billion to $2.05 billion and a full-year 2026 distribution of at least $3.70 per unit.
Throughput expectations for 2026 call for flat natural-gas volumes, a low-to-mid single-digit decrease in crude oil and NGLs, and an approximately 80% increase in produced-water volumes.
Other Developments
During the quarter, Western Midstream closed the acquisition of Aris Water Solutions, positioning the partnership as a more integrated produced-water services provider. The company also executed agreements for incremental disposal capacity tied to the Pathfinder project and commenced construction on the North Loving II processing train, which is expected to begin service in early second-quarter 2027.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.21% due to these changes.
VGM Scores
Currently, Western Midstream has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Western Midstream has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Western Midstream is part of the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry. Over the past month, Sunoco LP (SUN - Free Report) , a stock from the same industry, has gained 8.4%. The company reported its results for the quarter ended December 2025 more than a month ago.
Sunoco LP reported revenues of $8.6 billion in the last reported quarter, representing a year-over-year change of +63.2%. EPS of $0.09 for the same period compares with $0.75 a year ago.
Sunoco LP is expected to post earnings of $1.29 per share for the current quarter, representing a year-over-year change of +6.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.2%.
Sunoco LP has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Western Midstream (WES) Down 0.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Western Midstream (WES - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Western Midstream due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Western Midstream Partners, LP before we dive into how investors and analysts have reacted as of late.
Q4 Earnings & Revenue Performance
In the fourth quarter of 2025, total revenues and other income rose to $1.03 billion, up from $928.5 million in the year-ago quarter, representing an increase of roughly 11%.
For the full year, revenues climbed to $3.84 billion from $3.61 billion in 2024. Fourth-quarter net income attributable to limited partners totaled $187.2 million, or $0.47 per diluted common unit, compared with $325.9 million, or $0.85 per diluted unit, in the fourth quarter of 2024. The year-over-year decline in quarterly earnings reflects higher operating and transaction-related costs, including those associated with the Aris acquisition, as well as certain non-cash revenue adjustments.
Other Key Business Metrics
Quarterly operating data pointed to mixed trends across commodities. In the fourth quarter, natural-gas throughput averaged 5,162 MMcf/d, slightly below the prior quarter’s 5,358 MMcf/d, while crude-oil and NGLs volumes were largely steady at 508 MBbls/d. Produced-water throughput, however, jumped to 2,693 MBbls/d from 1,217 MBbls/d in the third quarter, reflecting the integration of Aris and continued basin activity.
Margins were relatively stable for natural gas at $1.26 per Mcf in the fourth quarter versus $1.27 in the third, while crude-oil and NGL margins narrowed to $2.77 per barrel from $3.10. Produced-water margins also eased sequentially to $0.83 per barrel from $0.94.
Cash flow remained solid. Fourth-quarter operating cash flow totaled $557.6 million, down modestly from $570.2 million in the third quarter, while free cash flow came in at $340.8 million. Cash capital investments rose to $216.8 million from $172.8 million in the prior quarter, reflecting expansion activity.
Management Commentary and Strategic Priorities
Management emphasized efficiency improvements and cost control alongside growth. The company reduced fourth-quarter operation and maintenance expenses by 12% compared with the prior-year period and highlighted more than $100 million in annualized O&M savings from the first to the fourth quarter of 2025.
Strategically, Western Midstream is prioritizing expansion projects and disciplined capital allocation. Net leverage stood at 3.18x as of Dec. 31, 2025, and management reiterated a focus on executing organic growth projects, pursuing accretive M&A and targeting mid-to-low single-digit annual distribution growth.
Factors Influencing Headline Results
A key driver of 2025 performance was the acquisition of Aris Water Solutions, which significantly expanded the partnership’s produced-water footprint. The transaction enhanced recycling and disposal capacity and supported a 40% year-over-year increase in produced-water throughput.
Additionally, the partnership continued to advance the Pathfinder Pipeline, a produced-water transportation project expected to enter service in the first quarter of 2027. The pipeline is designed to handle more than 800 MBbls/d initially and is supported by firm commitments from Occidental, providing longer-term visibility into water-handling volumes.
Guidance
For 2026, Western Midstream projects Adjusted EBITDA between $2.5 billion and $2.7 billion, implying continued growth from 2025 levels. Total capital expenditures are expected to range from $850 million to $1.0 billion, with 76% allocated to expansion projects. The partnership also forecasts distributable cash flow of $1.85 billion to $2.05 billion and a full-year 2026 distribution of at least $3.70 per unit.
Throughput expectations for 2026 call for flat natural-gas volumes, a low-to-mid single-digit decrease in crude oil and NGLs, and an approximately 80% increase in produced-water volumes.
Other Developments
During the quarter, Western Midstream closed the acquisition of Aris Water Solutions, positioning the partnership as a more integrated produced-water services provider. The company also executed agreements for incremental disposal capacity tied to the Pathfinder project and commenced construction on the North Loving II processing train, which is expected to begin service in early second-quarter 2027.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.21% due to these changes.
VGM Scores
Currently, Western Midstream has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Western Midstream has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Western Midstream is part of the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry. Over the past month, Sunoco LP (SUN - Free Report) , a stock from the same industry, has gained 8.4%. The company reported its results for the quarter ended December 2025 more than a month ago.
Sunoco LP reported revenues of $8.6 billion in the last reported quarter, representing a year-over-year change of +63.2%. EPS of $0.09 for the same period compares with $0.75 a year ago.
Sunoco LP is expected to post earnings of $1.29 per share for the current quarter, representing a year-over-year change of +6.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.2%.
Sunoco LP has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.