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Western Midstream Partners, LP (WES) — WACC Analysis

WACC Breakdown

Western Midstream Partners, LP (WES) has a weighted average cost of capital (WACC) of 6.9%. The cost of equity is 8.2%, derived from a beta of 0.63 and a risk-free rate of 5.0%. The after-tax cost of debt is 3.9%. The capital structure is 69.8% equity and 30.2% debt.

Interpretation

A WACC of 6.9% suggests that the market views Western Midstream Partners, LP as relatively low-risk, with a lower cost of financing.

Investors can compare WES's WACC of 6.9% against industry peers to gauge its relative financing costs. A beta of 0.63 reflects the stock's volatility relative to the broader market.

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VALUATION

WES WACC: 6.93% for Western Midstream Partners, LP

Current inputs imply a 8.24% cost of equity and a 4.96% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Western Midstream Partners, LP Common Stock (WES) WACC Results
Weighted Average Cost of Capital
6.93%
Cost of Equity
8.24%
Risk-Free Rate5.05%
Beta0.63
Market Risk Premium4.23%
Cost of Debt
3.92%
Pre-Tax Cost of Debt4.96%
Tax Rate21.00%
Tax Shield1.04%
Capital Structure
Equity: 69.79%($18.93B)
Debt: 30.21%($8194.17M)
Equity Component
5.75%
69.79% × 8.24%
Debt Component
1.18%
30.21% × 3.92%

Western Midstream Partners, LP (WES) WACC in context

Western Midstream Partners, LP (WES) currently screens with an estimated WACC of 6.93%. That blends a 8.24% cost of equity, a 4.96% pre-tax cost of debt, and a 69.79% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What WES WACC implies

A 6.93% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates WES

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.63 and equity accounts for 69.79% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.