Wells Fargo upgrades to Equal-Weight with $300 target price.

Wells Fargo upgrades to Equal-Weight with $300 target price.

Wells Fargo has raised its price target on Aris Water Solutions Inc (NYSE:ARIS) to $300 from $230, while maintaining an Equal Weight rating on the stock. The upgrade comes following the company's strong second-quarter results and the pending merger with Western Midstream Partners (NYSE:WES).

According to Wells Fargo, Aris Water's second-quarter performance was "in line" with expectations, with a 16.4% revenue growth and a current ratio of 1.73. The new price target reflects the cash component offered by WES in the merger transaction, which is valued at approximately $1.5 billion. Under the merger agreement, Aris Water shareholders will receive either 0.625 WES units for each ARIS share or $25 in cash [1].

The merger with WES is the primary factor cited by Wells Fargo for its neutral stance, maintaining the Equal Weight rating. Despite the upgrade in the price target, the rating reflects a cautious approach due to the pending transaction and its potential impact on the stock's valuation.

Recently, Aris Water Solutions reported Adjusted EBITDA of $54.6 million for the second quarter of 2025, surpassing both Stifel's estimate of $52.6 million and the consensus expectation of $53.4 million [1]. Additionally, the company extended its Water Gathering and Disposal Agreement with ConocoPhillips (NYSE:COP) to 2040, further solidifying its market position [1].

These developments indicate significant changes for Aris Water Solutions in the current market landscape. The company's strong financial performance and strategic partnerships position it favorably for future growth, despite the cautious rating from Wells Fargo.

References:
[1] https://www.investing.com/news/analyst-ratings/aris-water-solutions-price-target-raised-to-25-from-23-at-wells-fargo-93CH-4199686