Hess (HES) AI Stock Analysis

• Market Cap: $40.33B
• Dividend Yield: 1.49%
• Average Volume (3M): 2.19M
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.77
• Revenue Growth: 20.51%
• EPS Growth: 99.86%
• Country: US
• Employees: 1,797
• Sector: Energy
• Sector Strength: 50
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 8.98
• Shares Outstanding: 309,309,750
• 10 Day Avg. Volume: 1,955,315
• 30 Day Avg. Volume: 2,190,846
• PEG Ratio: 0.15
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.74
• Price to Cash Flow (P/CF): 9.20
• P/FCF Ratio: 8.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $152.57
• Price Target Upside: 17.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Hess demonstrates strong financial performance with robust revenue and profit growth, supported by solid cash flow metrics. However, technical analysis indicates the stock is experiencing bearish momentum, which may concern short-term investors. Valuation metrics are favorable with an attractive P/E ratio, though the dividend yield is not a significant factor for growth-focused investors. Overall, while the company is fundamentally strong, current market conditions suggest some caution.

Positive Factors

Acquisition Progress

HES continues to progress toward the proposed acquisition by CVX, with FTC approval received.

FPSO Performance

Production rates on all three FPSOs in Guyana continue to exceed stated capacity after successful debottlenecking.

Pricing and Margins

Realized pricing was 4% above consensus, driving better margins despite higher unit costs.

Production Performance

HES beat total production estimates by 3% at 495 MBOED, with oil volumes also exceeding expectations.

Negative Factors

Exploration Expenses

HES incurred exploration expense of $139m in 4Q, including costs for a dry hole at the Vancouver exploration well.

Production Guidance

1Q25 production guidance is lower than expectations due to planned maintenance in Guyana and weather impacts in the Bakken.

Hess Business Overview & Revenue Model

Company Description

Hess Corporation, an exploration and production company, explores, develops, produces, purchases, transports, and sells crude oil, natural gas liquids (NGLs), and natural gas. The company operates in two segments, Exploration and Production, and Midstream. It conducts production operations primarily in the United States, Guyana, the Malaysia/Thailand Joint Development Area, and Malaysia; and exploration activities principally offshore Guyana, the U.S. Gulf of Mexico, and offshore Suriname and Canada. The company is also involved in gathering, compressing, and processing natural gas; fractionating NGLs; gathering, terminaling, loading, and transporting crude oil and NGL through rail car; and storing and terminaling propane, as well as providing water handling services primarily in the Bakken Shale plays in the Williston Basin area of North Dakota. As of December 31, 2021, it had total proved reserves of 1,309 million barrels of oil equivalent. The company was incorporated in 1920 and is headquartered in New York, New York.

How the Company Makes Money

Hess Corporation generates revenue primarily through the production and sale of crude oil and natural gas. The company's key revenue streams include the sale of crude oil, natural gas liquids, and natural gas extracted from its exploration and production activities. Hess's earnings are significantly influenced by global oil and gas prices, production volumes, and the company's ability to efficiently manage its exploration and extraction operations. Strategic partnerships, such as those with other oil companies and national governments, play a crucial role in accessing and developing new oil and gas reserves. Additionally, Hess employs hedging strategies to mitigate the impact of price volatility on its revenue.

Hess Financial Statement Overview

Summary

Hess's financial performance in 2024 is impressive, marked by strong revenue and profit growth, enhanced margins, and improved cash flow metrics. The balance sheet reflects a stable capital structure, though monitoring debt levels and equity ratios is advisable. The company is well-positioned for growth in the fossil fuels industry, although potential risks include market volatility and regulatory changes affecting the sector.

Income Statement

Hess has shown strong revenue growth, with a 23.8% increase from 2023 to 2024. The gross profit margin remains robust at 100%, indicating efficient cost management. The net profit margin improved to 21.3% in 2024, up from 13.1% in 2023, reflecting enhanced profitability. EBIT and EBITDA margins are strong at 76.1% and 52.8% respectively in 2024, showing operational efficiency. Overall, Hess demonstrates solid growth and profitability, though it's important to monitor fluctuations in the fossil fuels industry.

Balance Sheet

The debt-to-equity ratio of 0.84 in 2024 indicates a moderate leverage level, which is stable compared to industry standards. The return on equity has improved to 24.7% in 2024 from 15.4% in 2023, signifying effective use of equity capital. The equity ratio of 42.3% is healthy, showing that a significant portion of assets is financed by shareholders' equity. Overall, the balance sheet is strong but maintaining or improving the equity ratio would enhance financial stability.

Cash Flow

Hess has demonstrated significant cash flow improvements with a strong operating cash flow to net income ratio of 2.29 in 2024, indicating high-quality earnings. The free cash flow has also turned positive in 2024 at $1.713 billion, a remarkable turnaround from a negative free cash flow in 2023. The free cash flow to net income ratio stands at 0.62, reflecting solid cash generation relative to profit. Overall, cash flow management appears robust, supporting future growth and investment opportunities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
13.02B	10.51B	11.32B	7.47B	4.67B
	Gross Profit
13.02B	8.25B	7.91B	4.54B	1.25B
	EBIT
9.91B	5.03B	4.13B	2.09B	-343.00M
	EBITDA
6.87B	5.09B	5.79B	3.51B	-112.00M
	Net Income Common Stockholders
2.77B	1.38B	2.10B	890.00M	-2.84B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.17B	1.69B	2.49B	2.71B	1.74B
	Total Assets
26.55B	24.01B	21.73B	20.52B	18.82B
	Total Debt
9.46B	9.60B	9.15B	9.14B	9.07B
	Net Debt
8.29B	7.91B	6.66B	6.43B	7.34B
	Total Liabilities
14.55B	14.40B	13.11B	13.49B	12.49B
	Stockholders Equity
11.22B	8.99B	7.98B	6.30B	5.37B
Cash Flow		Free Cash Flow
654.00M	-166.00M	1.22B	1.14B	-864.00M
	Operating Cash Flow
5.60B	3.94B	3.94B	2.89B	1.33B
	Investing Cash Flow
-4.94B	-4.11B	-2.56B	-1.32B	-1.71B
	Financing Cash Flow
-1.18B	-627.00M	-1.11B	-591.00M	568.00M

Hess Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 130.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HES, the sentiment is Negative. The current price of 130.03 is below the 20-day moving average (MA) of 139.66, below the 50-day MA of 144.72, and below the 200-day MA of 140.30, indicating a bearish trend. The MACD of -5.78 indicates Positive momentum. The RSI at 40.07 is Neutral, neither overbought nor oversold. The STOCH value of 35.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HES.

Hess Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DVN	75 Outperform	$19.13B	6.47	21.77%	4.01%	3.00%	-21.63%
EOG	74 Outperform	$61.40B	9.89	22.29%	3.33%	0.88%	-13.66%
WDS	73 Outperform	$23.91B	6.79	10.23%	9.22%	-0.93%	115.30%
HES	71 Outperform	$40.33B	14.52	27.41%	1.49%	20.51%	99.86%
FANG	68 Neutral	$37.94B	8.31	12.20%	4.55%	31.55%	-9.00%
OXY	68 Neutral	$37.56B	16.35	8.88%	2.25%	-4.35%	-37.69%
Sector *	55 Neutral	$7.03B	3.43	-6.29%	6.02%	-0.15%	-51.34%