Morgan Stanley initiates coverage on WaterBridge Infrastructure stock with Equalweight rating

Published 13/10/2025, 09:30
Morgan Stanley initiates coverage on WaterBridge Infrastructure stock with Equalweight rating

Investing.com - Morgan Stanley initiated coverage on WaterBridge Infrastructure (NYSE:WBI) with an Equalweight rating and a $32.00 price target on Monday. The target represents potential upside from the current price of $24.17, though InvestingPro data indicates the stock’s RSI suggests overbought conditions.

WBI is described as a pure-play water infrastructure service provider for exploration and production companies, with assets primarily concentrated in the Delaware Basin, according to Morgan Stanley’s research note. The company, currently valued at $2.98 billion, generates annual revenue of $645.71 million with a robust gross margin of 58.56%.

The company provides water handling and recycling services for water produced alongside crude oil and natural gas, operating what Morgan Stanley identifies as the largest produced water infrastructure system in the United States.

As of July 31, 2025, WBI’s infrastructure network included approximately 2,500 miles of pipelines and 196 produced water handling facilities on a pro forma basis, with its system handling over 2.6 million barrels per day (MMBPD) of produced water.

Morgan Stanley noted that WBI’s recent pipeline expansions have increased its capacity to 4.5 MMBPD, exceeding current usage and positioning the company for expected growth over the next five years without requiring significant additional capital expenditure beyond in-flight projects to achieve strong EBITDA growth.

In other recent news, WaterBridge Infrastructure LLC has been active with several significant financial developments. The company announced it has priced an offering of $1.425 billion in senior unsecured notes through its subsidiary, WBI Operating LLC. This offering includes $825 million in 6.25% senior unsecured notes due in 2030 and $600 million in 6.50% senior unsecured notes due in 2033. WaterBridge plans to use the proceeds from the $1.4 billion senior notes offering to repay outstanding borrowings under its legacy term loan facilities, which total $1.712 billion. Additionally, WaterBridge completed its initial public offering with the full exercise of underwriters’ options, resulting in approximately $677 million in total net proceeds.

In analyst coverage, Stifel initiated coverage on WaterBridge Infrastructure with a Buy rating, setting a price target of $30.00. Stifel highlighted the company’s produced water disposal services in the Delaware Basin as offering attractive economics. Meanwhile, Goldman Sachs initiated coverage with a Neutral rating and a $21.00 price target, noting the company’s significant underground disposal capacity advantages. These developments indicate a mixed but generally positive outlook from analysts on WaterBridge’s market position and financial strategies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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