Hess: Analysts’ Recommendations and Mean Target Price

Based on Reuters data, among the 22 analysts tracking Hess (HES), 50% recommended a “hold,” 41% recommended a “buy,” and 9% recommended a “sell.”

On May 16, UBS increased its target price on Hess by $3 to $61. On May 14, BMO reduced its target price on the stock by $5 to $60. On May 29, Hess stock closed at $58.54.

Based on the guidance, between 2017 and 2025, Hess expects its production to grow at a compound annual growth rate of 15%. From 2020, most of the production growth will likely be from Guyana. The growth will likely shift the company’s production mix to ~80% in liquid in 2025. In the last quarter, Hess operated with a production mix of 68.8% in liquid. Liquid includes oil and natural gas liquids. Also, 65% of the company’s production mix in 2025 will be benchmarked to Brent crude oil prices. The transformation will likely drive the company’s profitability.

The U.S. Energy Information Administration expects US crude oil production to make new record highs until 2025. The increase might widen the Brent-WTI spread—an important factor for upstream companies located in the United States.

Analysts’ mean target price for Hess is ~$71.26, which implies a potential upside of ~21.7% based on its last closing price. EOG Resources (EOG) and ConocoPhillips’ (COP) target prices suggest potential upsides of 40.6% and 33.1%, respectively.