Western Midstream Buys $1.6B Brazos Assets, Q1 Revenue Jumps 22.5%
WES•Western Midstream expanded Delaware Basin footprint by 49% with a $1.6 billion acquisition and posted Q1 revenue up 22.5% to $1.1 billion with $0.85 per unit earnings, beating estimates. The company raised quarterly distribution to $0.93 per unit while Morgan Stanley lifted its price target to $51 despite retaining an underweight rating.
1. $1.6 Billion Brazos Acquisition
Western Midstream closed its $1.6 billion purchase of Brazos Delaware, increasing its Delaware Basin presence by 49%. The acquisition adds gathering and processing assets aimed at boosting throughput capacity and produced-water handling.
2. Q1 2026 Financial Highlights
The partnership reported Q1 revenue of $1.1 billion, up 22.5% year-over-year, driven by higher natural gas and crude oil volumes. Unit earnings reached $0.85, a 7.6% increase from prior year and above the $0.74 consensus estimate.
3. Increased Distribution and Yield
Management raised the quarterly distribution to $0.93 per unit, reflecting strong cash flow generation and manageable debt levels. The new distribution rate translates to an annualized yield above 8%, underscoring income stability.
4. Morgan Stanley's Rating and Target
Morgan Stanley retained its underweight rating but bumped the price target from $41 to $51. The higher target incorporates potential midstream sector upside from expanded operations and robust first-quarter performance.
