Market Overview

Wells Fargo Makes Bullish Call On Select Energy Services Following Rockwater Merger

Wells Fargo Makes Bullish Call On Select Energy Services Following Rockwater Merger
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Select Energy Services: Another Outstanding Quarter; Set To Differentiate Itself In 2019 (Seeking Alpha)

Select Energy Services Inc (NYSE: WTTR) completed amerger with Rockwater Energy Solutions Nov. 1. 

The Analyst

Wells Fargo's Judson Bailey is resuming coverage on Select Energy with an Outperform rating and $20 price target.

The Thesis

The Rockwater acquisition is going to be transformative for Select Energy Services, as it significantly expands the company's geographic footprint, customer base and product line diversity, said Bailey. (See Bailey's track record here.)

The analyst said he expects pre-frac water demand to remain solid and forecasts a 37 percent year-over-year revenue increase in 2018 and a 16-percent increase in 2019.

The acquisition will add to Select Energy Services' Permian presence and complement the company's strong presence in Bakken and Eagle Ford with Rockwater's presence in MidCon and the Marcellus/Utica basins, the analyst said. 

The Price Action

The stock spiked around 2.5 percent Tuesday and has been trading in a range from $14 to $17 since late September. It is now trading close to $16.

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Latest Ratings for WTTR

Nov 2018Wells FargoMaintainsOutperformOutperform
Sep 2018JP MorganMaintainsNeutralNeutral
Sep 2018CitigroupMaintainsNeutralNeutral

View More Analyst Ratings for WTTR
View the Latest Analyst Ratings

Posted-In: Judson Bailey Wells FargoAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


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