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 ReadXylem 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.

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