Stifel downgraded its price target for Western Gas Partners (WES) to $42 from $43 on Thursday but left the firm’s rating unchanged at Hold. The partnership’s shares are trading at $40.95, below Stifel’s revised target, and have fallen 4.5% over the last week.
The analyst adjustment follows Western Gas Partners’ fourth‑quarter 2025 results, which came in slightly under Stifel’s estimates, and a 2026 outlook the firm characterized as softer than the market expected. Management expects growth to resume in 2026 after the completion of the Aris Water acquisition in the fourth quarter, but it now anticipates a lower growth pace than earlier projected.
Company commentary cited several drivers for the trimmed outlook. Activity from a large operator, OXY, has slowed, and a portion of producers in the Permian have temporarily shut in wells because negative natural gas spreads have made production uneconomic. Western Gas Partners signaled expectations for spreads to recover in the second half of the year and said it intends to implement cost controls to mitigate the near‑term impact.
In response to reduced activity and gains from operational efficiencies, Western Gas Partners reduced its capital expenditure forecast for 2026. Stifel framed the lower capex as constructive from a balance‑sheet perspective, noting that reduced investment helps keep leverage in check and preserves optionality for the business.
Despite the nearer‑term headwinds, the partnership continues to offer a robust cash return profile. Western Gas Partners is paying an 8.8% dividend yield and has maintained dividend payments for 14 consecutive years.
Separate research notes indicate that three analysts have lowered earnings estimates for the upcoming period, consistent with the more cautious tone from management and the industry backdrop. Some valuation work cited in market commentary also suggests the shares could be undervalued at current levels, though readers are advised to consult full research reports for deeper analysis.
Western Gas Partners also provided an update to its full‑year 2026 guidance alongside the fourth‑quarter 2025 results. The guidance reset reflects the combination of the Aris Water acquisition, reduced activity from major producers, and efficiency gains that management expects to realize.
Related company results
In a separate report, Western Midstream Partners released fourth‑quarter 2025 results that fell short of expectations on both profit and revenue. The company posted earnings per share of $0.47, versus a forecast of $0.94, a 50% negative surprise. Revenue was $1.03 billion compared with an anticipated $1.04 billion. These misses underscore the challenges the midstream sector has faced in meeting near‑term market expectations.
There were no reports of mergers or acquisitions in the most recent updates for Western Midstream Partners, and no recent analyst upgrades or downgrades were cited in the company’s disclosure. Market participants will be watching for any future guidance changes or strategic actions from the company.
How the market is responding
Stifel’s modest cut to the price target coupled with a Hold rating signals a measured view: the firm recognizes the partnership’s cash return attributes and lower leverage potential from reduced capex, while also flagging near‑term risks tied to commodity spreads and operator activity. The share price, trading below the new target, reflects these mixed signals as well as the recent weekly decline.
Note: where research notes are referenced, readers should review the full reports for methodology and assumptions behind estimates.