Select Energy Services: Positioned for Growth and Stability with Strategic Shifts and Infrastructure Investments

Select Energy Services (WTTR – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Scott Gruber from Citi reiterated a Buy rating on the stock and has a $14.00 price target.

Scott Gruber has given his Buy rating due to a combination of factors that highlight the potential growth and stability of Select Energy Services. The company is poised to benefit from increasing volumes of produced water, even if shale oil production levels off, which supports the need for more recycling and enhances pricing power for facility construction. Additionally, WTTR’s strategic shift from lower-margin, cyclical revenues to higher-margin, stable revenues from produced water positions it favorably for future growth.
Furthermore, WTTR’s investment in a robust network of pipelines, disposal wells, and recycling centers increases its operational flexibility and value. The partnership with AV Farms further diversifies its revenue streams, providing long-term stability through contracts with municipalities and industrial clients. With expectations of growing EBITDA and free cash flow, particularly as capital expenditures decrease, WTTR is well-positioned for significant upside potential, justifying the Buy rating.