Western Midstream Is Now As Expensive As EPD - Think About That

I reiterate my Strong Buy on Western Midstream: the April call worked, returning ~25%, but the growth-led thesis ahead still stands. The rerating to EPD's multiple is largely done, so returns from here rely on 7-8% EBITDA growth, not multiple expansion. Growth alone supports ~15% returns at a flat multiple; the compressed ~7.6% yield matters mainly for income-only entries. The scaling water franchise is the real optionality—it could push WES above EPD's multiple, but I am not underwriting that yet.

In April, I had rated Western Midstream Partners ( WES ) a Strong Buy on a discounted yield and valuations that still had room to grow for a midstream play that was inflecting.