Hess Corporation (HES) Stock Valuation — PE Analysis
Oil & Gas Exploration & Production · NYSE
Current Price
$148.97
PE Ratio (TTM)
16.5x
Intrinsic Value
$255.94
+41.8% margin of safety
COMPETITIVE MOAT
↑Strategic Bakken Acreage
Hess possesses significant, high-quality acreage in the Bakken shale play. This concentration of resources provides a cost advantage and operational efficiencies.
↑Hess Midstream Infrastructure
The company benefits from its ownership in Hess Midstream, which offers integrated infrastructure. This provides reliable takeaway capacity and fee-based revenue streams.
↑Chevron Partnership
The strategic partnership with Chevron, particularly in Guyana, offers access to capital and expertise. This collaboration de-risks large-scale offshore projects.
INVESTMENT RISKS
↓Guyana Project Execution
The success of Hess's significant investments in Guyana is crucial. Any delays or cost overruns in these large offshore projects pose a substantial risk.
↓Regulatory and Environmental Scrutiny
The oil and gas industry faces increasing regulatory and environmental scrutiny. Changes in policy or stricter regulations could impact Hess's operations and profitability.
↓Geopolitical Instability
Operations in certain regions, like Guyana, can be subject to geopolitical risks. Political instability or changes in government policies could affect Hess's assets and future development.
Base case
HES base case PE valuation
A base case PE valuation for HES estimates a fair value of about $255.94 per share, against a current price of $148.97. The model assumes 16.3% annual earnings growth, a 17x target PE multiple, and a 10% discount rate.
Intrinsic Value
$255.94
Margin of safety
+41.8%
Expected annual return
+11.4%
Base case assumptions: 16.3% annual earnings growth, 17x target PE, 10% discount rate, 5 year projection. Data as of 2025-07-18.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the HES PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Hess Corporation respond.
Open PE Calculator for HESCompany Overview
Hess Corporation is an integrated energy company involved in the entire lifecycle of hydrocarbon assets. Its core business includes the exploration, development, production, acquisition, transportation, and sale of crude oil, natural gas liquids (NGLs), and natural gas. The firm's activities are organized into two primary divisions: Exploration and Production (E&P) and Midstream. Hess conducts production operations across the United States, Guyana, the Malaysia/Thailand Joint Development Area, and Malaysia. Simultaneously, its exploration ventures are focused offshore Guyana, within the U.S. Gulf of Mexico, and off the coasts of Suriname and Canada. Complementing its E&P efforts, the company's Midstream segment handles the gathering, compression, and processing of natural gas, along with NGL fractionation. It also manages the collection, storage, loading, and rail transport of crude oil and NGLs, in addition to propane storage and terminaling. These midstream services further encompass water handling, predominantly in the Bakken Shale region of North Dakota's Williston Basin. As of December 31, 2021, Hess reported proven reserves totaling 1,309 million barrels of oil equivalent. The company was established in 1920 and its corporate headquarters are located in New York, New York.
Financial Metrics — HES PE Stock Valuation Data
PE Ratio (TTM)
16.5x
PEG Ratio
0.97
Earnings Yield
6.06%
ROE (TTM)
27.4%
Revenue/Share (TTM)
$42.02
Debt/Equity
0.84x
Frequently Asked Questions
What is the PE ratio of HES?
The trailing twelve-month PE ratio of HES reflects how much investors pay per dollar of Hess Corporation's earnings. This metric is most useful when compared to Oil & Gas Exploration & Production peers and the company's own historical range.
Is HES overvalued based on PE ratio?
HES's PE of 16.5x combined with a PEG ratio of 0.97 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Exploration & Production, a DCF analysis may be more appropriate.
How do I value HES stock using PE ratio?
To value Hess Corporation using PE: (1) Compare the current PE (16.5x) against the Oil & Gas Exploration & Production median to assess relative pricing, (2) check the PEG ratio (0.97) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of HES?
HES's PEG ratio is 0.97, calculated by dividing the PE ratio (16.5x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for HES stock valuation?
PE ratio gives a quick relative read — how HES is priced versus Oil & Gas Exploration & Production peers. DCF provides an absolute value based on projected free cash flows. For HES, with a strong ROE of 27.4%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See HES DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value HES with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2025-07-18. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.