Update shared on05 Sep 2025
Fair value Decreased 3.11%Despite an unchanged consensus price target, Aris Water Solutions’ future P/E ratio has dropped sharply, indicating improved earnings expectations that support the steady fair value estimate of $26.60.
What's in the News
- Western Midstream Partners agreed to acquire Aris Water Solutions for $1.5 billion, with shareholders offered a choice of cash, WES common units, or a mix, subject to proration; the deal is expected to close in Q4 2025 pending approvals.
- The merger agreement includes a $57 million termination fee for Aris and an $11.9 million expense reimbursement if shareholder approval fails; the transaction is expected to generate $40 million in annual cost synergies and be accretive to 2026 free cash flow per unit.
- Aris Water Solutions dropped from multiple Russell indices, including the Russell 3000, Russell 2000, Russell Microcap, and Russell 2500 (and associated Value and Growth variants).
- Aris extended its Water Gathering and Disposal Agreement with ConocoPhillips by seven years, to May 31, 2040, maintaining terms and strengthening their operational relationship.
- Q2 and first half total water volumes increased year-over-year, reaching 1,757,000 barrels per day for the quarter and 1,754,000 barrels per day for the six months.
Valuation Changes
Summary of Valuation Changes for Aris Water Solutions
- The Consensus Analyst Price Target remained effectively unchanged, at $26.60.
- The Future P/E for Aris Water Solutions has significantly fallen from 18.33x to 10.07x.
- The Discount Rate for Aris Water Solutions remained effectively unchanged, at 8.16%.
Disclaimer
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