Discounted Cash Flow (DCF) Analysis Unlevered

Hess Midstream LP (HESM)

$31

+0.30 (+0.98%)

All numbers are in Millions, Currency in USD

Stock DCF: 235.27 | 31 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	712.70	848.30	1,091.90	1,203.80	1,275.20	1,478.98	1,715.33	1,989.45	2,307.37	2,676.10
Revenue (%)
EBITDA	505.10	380	586.80	903.40	796.50	907.84	1,052.92	1,221.18	1,416.33	1,642.67
EBITDA (%)
EBIT	378.20	237.50	429.90	737.80	615.20	680.24	788.94	915.02	1,061.24	1,230.83
EBIT (%)
Depreciation	126.90	142.50	156.90	165.60	181.30	227.61	263.98	306.16	355.09	411.84
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	109.30	3.30	2.60	2.20	3.10	48.48	56.23	65.21	75.63	87.72
Total Cash (%)
Account Receivables	67.80	87.90	93.20	120.30	123	142.13	164.84	191.18	221.74	257.17
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	34.40	78.50	51	64.50	35	79.43	92.13	106.85	123.92	143.73
Accounts Payable (%)
Capital Expenditure	-241.90	-306.40	-301.10	-163.20	-238.20	-384.16	-445.55	-516.75	-599.33	-695.11
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 31
Beta	1.572
Diluted Shares Outstanding	41.40
Cost of Debt
Tax Rate	4.11
After-tax Cost of Debt	4.96%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.675
Total Debt	2,885.60
Total Equity	1,283.40
Total Capital	4,169
Debt Weighting	69.22
Equity Weighting	30.78
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	712.70	848.30	1,091.90	1,203.80	1,275.20	1,478.98	1,715.33	1,989.45	2,307.37	2,676.10
EBITDA	505.10	380	586.80	903.40	796.50	907.84	1,052.92	1,221.18	1,416.33	1,642.67
EBIT	378.20	237.50	429.90	737.80	615.20	680.24	788.94	915.02	1,061.24	1,230.83
Tax Rate	78.25%	-0.03%	1.48%	2.31%	4.11%	17.22%	17.22%	17.22%	17.22%	17.22%
EBIAT	82.26	237.57	423.52	720.77	589.92	563.07	653.05	757.42	878.45	1,018.84
Depreciation	126.90	142.50	156.90	165.60	181.30	227.61	263.98	306.16	355.09	411.84
Accounts Receivable	-	-20.10	-5.30	-27.10	-2.70	-19.13	-22.71	-26.34	-30.55	-35.43
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	44.10	-27.50	13.50	-29.50	44.43	12.69	14.72	17.08	19.80
Capital Expenditure	-241.90	-306.40	-301.10	-163.20	-238.20	-384.16	-445.55	-516.75	-599.33	-695.11
UFCF	-32.74	97.67	246.52	709.57	500.82	431.82	461.46	535.21	620.74	719.93
WACC
PV UFCF						403.46	402.84	436.52	473.03	512.58
SUM PV UFCF										2,228.43

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.03
Free cash flow (t + 1)	734.33
Terminal Value	14,599.07
Present Value of Terminal Value	10,394.36

Intrinsic Value

Enterprise Value	12,622.79
Net Debt	2,882.50
Equity Value	9,740.29
Shares Outstanding	41.40
Equity Value Per Share	235.27