Wells Fargo Updates 2026 Assumptions for Western Midstream (WES)

Western Midstream Partners, LP (NYSE:WES) is included among the 13 Best February Dividend Stocks to Buy.

On January 22, Wells Fargo analyst Ned Baramov lowered the firm’s price target on Western Midstream Partners, LP (NYSE:WES) to $39 from $40 while maintaining an Equal Weight rating on the stock. The adjustment reflects updated assumptions for 2026 and beyond, including lower expected operating cash flow, reduced capital spending in 2026, a smaller unit count and distributions, and higher anticipated cost savings.

A few days earlier, on January 20, Western Midstream said it had renegotiated certain contracts with Occidental Petroleum tied to its Delaware Basin assets. The revised agreement moves natural gas gathering to a simpler fixed-fee structure. As part of the deal, Occidental will transfer 15.3 million common units, valued at about $610 million, back to Western Midstream. Once those units are redeemed, Occidental’s ownership stake is expected to fall to roughly 40%.

Occidental remains Western Midstream’s largest shareholder, according to LSEG data. After the contract changes, about 9% of Western’s revenue will still be generated under cost-of-service arrangements. Most of those contracts are set to expire between the late 2020s and the mid-to-late 2030s, at which point they could shift to fixed-fee terms. Under the previous structure, fees were based on the cost of providing services plus a regulated return. Under the new agreement, Occidental will pay a fixed rate instead.

Western Midstream also entered into a new natural gas gathering and processing agreement with ConocoPhillips covering a portion of its Delaware Basin volumes.

Western Midstream Partners, LP (NYSE:WES) operates and develops midstream assets across Texas, New Mexico, Colorado, Utah, and Wyoming.

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