Select Water Solutions stock initiated with Buy rating at Texas Capital

Texas Capital Securities initiated coverage on Select Water Solutions (NYSE:WTTR) with a Buy rating and an $18 price target, citing the company's market leadership in full lifecycle water solutions, attractive valuation, and strategic shift to an infrastructure-led business model for more stable cash flows. This positive outlook comes despite a recent 9.4% stock decline and a Q2 2025 earnings miss, with the firm emphasizing WTTR's recycling-oriented model and ongoing strategic adjustments, including a new dual listing on NYSE Texas and revised executive compensation.

Analysis

Texas Capital Securities initiated coverage on Select Water Solutions (NYSE:WTTR) with a "Buy" rating and an $18.00 price target, signaling strong conviction despite the stock's recent 9.4% decline. This initiation supports the existing "Strong Buy" consensus among analysts, highlighting WTTR's market leadership in full lifecycle water solutions and an attractive relative valuation at its current $9.83 trading price.

The research firm emphasizes WTTR's strategic shift towards an infrastructure-led business model, which is expected to replace volatile activity-based revenue with more stable, predictable cash flows from long-term contracts. This transformation, coupled with a recycling-oriented model, positions the company to capitalize on a secular industry trend towards water recycling, offering a compelling combination of growth and value.

Despite the bullish analyst outlook, Select Water Solutions reported Q2 2025 earnings that missed analyst expectations, with EPS of $0.10 against an anticipated $0.12 and revenue of $364.22 million falling short of $367.53 million. Concurrently, the company announced a dual listing on the newly launched NYSE Texas as a founding member, alongside new executive severance agreements aimed at talent retention, indicating active strategic adjustments.

Key Decisions for Investors

• Investors should evaluate the long-term potential of Select Water Solutions' strategic shift to an infrastructure-led, recycling-oriented business model, which analysts believe offers stable cash flows and growth.
• Despite the "Buy" rating and $18 price target from Texas Capital Securities, investors should closely monitor future earnings reports for improved performance following the Q2 2025 miss and assess the impact of the recent 9.4% stock decline.
• Consider the implications of the dual listing on NYSE Texas and executive compensation adjustments as indicators of ongoing corporate strategy and potential for enhanced market visibility or talent retention.