Xylem Is A Secular Winner On Structurally Improved Portfolio, Analyst Says

Oppenheimer analyst Bryan F. Blair upgraded Xylem Inc XYL to Outperform from Perform and introduced a price target of $118. 

The analyst's rating upgrade reflects his confidence in Xylem's structurally improved portfolio, continued beat & raise prospects, and medium-term growth prospects.

The analyst views other trading headwinds as largely transitory and says that combined Xylem–Evoqua operations can drive profitable growth over the coming years.

Also Read: Xylem And Evoqua Merger: The Blueprint For Leading Global Smart Water Infrastructure, Predicts Analyst

The analyst projects steady top-line and cash flow growth going forward, given Xylem's backlog of ~$5.3 billion, resilient core WI demand, and benefit from a notably long tail for AMI adoption.

The analyst revised EPS to $3.67 (from $3.70) in FY23 and $4.12 (from $4.20) for FY24. He introduced FY25 EPS of $4.65 with expected revenue synergies (and related incremental drop-through), driving solid upside vs. 2024-25 projections.

Price Action: XYL shares are trading higher by 2.16% at $92.29 on the last check Thursday.