Hess Corporation (HES) Stock Valuation — PE Analysis
Oil & Gas Exploration & Production · NYSE
Current Price
$148.97
PE Ratio (TTM)
16.5x
Intrinsic Value
$250.22
+40.5% margin of safety
COMPETITIVE MOAT
↑Strategic Asset Location
Hess possesses prime acreage in the Bakken and Guyana, offering significant long-term production potential. These high-quality, low-cost resources are difficult for competitors to replicate.
↑Midstream Infrastructure Ownership
Ownership of critical midstream infrastructure, like pipelines and processing facilities, provides Hess with operational efficiencies and cost advantages. This integrated model enhances profitability.
↑Exploration Expertise & Track Record
Hess has a proven history of successful exploration and development, particularly in challenging offshore environments like Guyana. This expertise reduces exploration risk and enhances discovery success.
INVESTMENT RISKS
↓Commodity Price Volatility
As an oil and gas producer, Hess's profitability is highly sensitive to fluctuations in global crude oil and natural gas prices. Sustained low prices can significantly impact revenue and investment capacity.
↓Regulatory and Environmental Scrutiny
The oil and gas industry faces increasing regulatory oversight and environmental concerns. Stricter regulations on emissions, drilling practices, or permitting could increase operating costs and limit expansion.
↓Geopolitical Instability
Operations in regions like Guyana expose Hess to geopolitical risks. Political instability, changes in government policy, or regional conflicts can disrupt operations and impact asset values.
Base case
HES base case PE valuation
A base case PE valuation for HES estimates a fair value of about $250.22 per share, against a current price of $148.97. The model assumes 16.3% annual earnings growth, a 16.52x target PE multiple, and a 10% discount rate.
Intrinsic Value
$250.22
Margin of safety
+40.5%
Expected annual return
+10.9%
Base case assumptions: 16.3% annual earnings growth, 16.52x 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
Dividend Yield
1.34%
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.