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Xylem
(NYSE:XYL)
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Rating:69Neutral
Price Target:
$110.00
â–¼(-2.49% Downside)
Action:Downgraded
Date:09/30/26
The score is driven primarily by solid underlying financial quality (material margin expansion and manageable leverage) and a constructive earnings outlook with raised EPS/margin guidance and strong backlog/contract wins. Offsetting these positives are the sharp TTM revenue and free-cash-flow declines and clearly bearish technicals (price below major moving averages with negative momentum), with valuation also leaning modestly expensive at ~24x earnings.
Positive Factors
Essential water technology position
Xylem operates in essential water and wastewater applications serving utilities, industrial customers, buildings and agriculture. Its broad exposure across transport, treatment, monitoring and lifecycle services supports durable relevance as customers address water quality, availability and infrastructure resilience.
Negative Factors
Sharp trailing revenue decline
The sharp TTM revenue decline weakens confidence in the durability of recent earnings improvement and may reflect demand normalization, comparability issues or cyclicality. Sustained top-line weakness could eventually limit operating leverage, investment capacity and the benefits of margin expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Essential water technology position
Xylem operates in essential water and wastewater applications serving utilities, industrial customers, buildings and agriculture. Its broad exposure across transport, treatment, monitoring and lifecycle services supports durable relevance as customers address water quality, availability and infrastructure resilience.
Read all positive factors
Xylem Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down income from various business segments, revealing which parts of the company are driving growth and where there may be challenges.
Breaks down income from various business segments, revealing which parts of the company are driving growth and where there may be challenges.
Data provided by:
The Fly
The FlyXylem (XYL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.57B
Dividend Yield1.67%
Average Volume (3M)2.36M
Price to Earnings (P/E)24.1
Beta (1Y)0.83
Revenue Growth4.41%
EPS Growth9.23%
CountryUS
Employees22,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)4.20
Shares Outstanding233,486,820
10 Day Avg. Volume2,630,361
30 Day Avg. Volume2,355,489
Financial Highlights & Ratios
PEG Ratio4.89
Price to Book (P/B)2.89
Price to Sales (P/S)3.67
P/FCF Ratio36.42
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$152.33Price Target Upside35.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)5.66
Revenue Forecast (FY)$9.20B
Xylem Business Overview & Revenue Model
Company Description
Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for utility, industrial, and residential and commercial building services settings worldwide. It operates through Wa...
How the Company Makes Money
Xylem makes money primarily by selling water-related equipment, integrated solutions, and associated services to municipalities, utilities, and industrial/commercial customers worldwide. (1) Product sales: A significant portion of revenue comes fr...
Xylem Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 27, 2026
Earnings Call Sentiment Positive
The call presented a largely constructive operational and financial story: solid backlog and orders, record EPS, meaningful margin expansion, large strategic contract wins, and targeted M&A/portfolio actions. However, near-term headwinds — notably significant China weakness, MCS electric meter delays, and a ~2% walkaway revenue impact from 80/20 actions — are tempering top-line momentum and required a narrower revenue outlook for the year. On balance, the strength in margins, cash generation, high-impact wins (Dow and outsourced water), and accelerating exposure to high-growth markets like data centers and industrial verticals outweigh the near-term challenges.Positive Updates
Record EPS and Margin Expansion
Reported record GAAP EPS of $1.46 in Q2, up 16% year-over-year. Quarterly adjusted EBITDA margin of 23.3%, an improvement of 150 basis points versus prior year; full-year EBITDA margin guidance raised to 23.1%–23.5% (90–130 bps expansion YoY).
Negative Updates
Significant China Weakness
China revenue declined substantially (CFO cited a ~27% decline in China overall; Water Infrastructure experienced a ~40% decline in China), creating an approximate 1% headwind to total company revenue versus prior year and pressuring segment orders and revenue.
Read all updates
Q2-2026 Updates
Positive
Negative
Record EPS and Margin Expansion
Reported record GAAP EPS of $1.46 in Q2, up 16% year-over-year. Quarterly adjusted EBITDA margin of 23.3%, an improvement of 150 basis points versus prior year; full-year EBITDA margin guidance raised to 23.1%–23.5% (90–130 bps expansion YoY).
Read all positive updates
Company Guidance
Xylem narrowed its FY26 outlook to roughly $9.2 billion of reported revenue (about +2% year‑over‑year) with organic revenue growth of 2%–3% (prior guide 2%–4%); adjusted EBITDA margin is now expected at 23.1%–23.5% (90–130 bps expansion vs. prior year) and full‑year EPS was raised to $5.55–$5.70 (from $5.35–$5.60). For Q3 the company expects reported revenue to be flat (≈+3% organic), EBITDA margin of ~23.5%–24% (up 30–80 bps) and EPS of $1.42–$1.47. Management reiterated a low‑double‑digit free cash‑flow margin target for the year, noted net debt/adjusted EBITDA of 0.8x after opportunistic repurchases, trimmed the MCS full‑year outlook to low‑single‑digit revenue due to electric meter delays, and said there is no material impact from recent tariff changes.Xylem Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
69
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.13B | 9.04B | 8.56B | 7.36B | 5.52B | 5.20B |
| Gross Profit | 3.58B | 3.48B | 3.21B | 2.72B | 2.08B | 1.98B |
| EBITDA | 1.86B | 1.78B | 1.69B | 1.12B | 726.00M | 832.00M |
| Net Income | 1.01B | 957.00M | 890.00M | 609.00M | 355.00M | 427.00M |
Balance Sheet | ||||||
| Total Assets | 17.34B | 17.63B | 16.49B | 16.11B | 7.95B | 8.28B |
| Cash, Cash Equivalents and Short-Term Investments | 1.28B | 1.48B | 1.12B | 1.02B | 944.00M | 1.35B |
| Total Debt | 3.06B | 2.06B | 2.13B | 2.39B | 1.95B | 2.51B |
| Total Liabilities | 6.92B | 5.88B | 5.62B | 5.94B | 4.45B | 5.05B |
| Stockholders Equity | 10.42B | 11.48B | 10.64B | 10.17B | 3.49B | 3.22B |
Cash Flow | ||||||
| Free Cash Flow | 960.00M | 910.00M | 942.00M | 566.00M | 388.00M | 330.00M |
| Operating Cash Flow | 1.30B | 1.24B | 1.26B | 837.00M | 596.00M | 538.00M |
| Investing Cash Flow | -429.00M | -471.00M | -482.00M | -628.00M | -191.00M | -183.00M |
| Financing Cash Flow | -741.00M | -501.00M | -615.00M | -157.00M | -790.00M | -855.00M |
Xylem Technical Analysis
Negative
112.81
Price Trends
112.57
Negative
112.74
Negative
120.56
Negative
Market Momentum
-2.88
Positive
29.12
Positive
6.85
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XYL, the sentiment is Negative. The current price of 112.81 is above the 20-day moving average (MA) of 105.99, above the 50-day MA of 112.57, and below the 200-day MA of 120.56, indicating a bearish trend. The MACD of -2.88 indicates Positive momentum. The RSI at 29.12 is Positive, neither overbought nor oversold. The STOCH value of 6.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for XYL.
Xylem Risk Analysis
Xylem disclosed 24 risk factors in its most recent earnings report. Xylem reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Xylem Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $11.94B | 30.91 | 18.56% | 0.65% | 17.13% | 23.21% | |
78 Outperform | $18.35B | 33.02 | 17.59% | 1.04% | 7.02% | 24.24% | |
77 Outperform | $9.38B | 25.39 | 16.63% | 1.19% | -0.26% | 29.38% | |
75 Outperform | $18.29B | 39.42 | 10.35% | 0.75% | 28.07% | -19.95% | |
69 Neutral | $23.57B | 24.11 | 9.17% | 1.67% | 4.41% | 9.23% | |
65 Neutral | $8.54B | 13.21 | 17.13% | 2.00% | -2.15% | 8.39% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
XYL
Xylem
101.27
-44.57
-30.56%
FLS
Flowserve
73.12
21.00
40.29%
ITT
ITT
201.82
22.63
12.63%
NDSN
Nordson
327.85
102.11
45.23%
PNR
Pentair
52.99
-56.17
-51.46%
WTS
Watts Water Technologies
354.18
77.80
28.15%
Xylem Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Xylem Raises $1.5 Billion to Fund Pump Acquisitions
Positive
Sep 29, 2026
On September 29, 2026, Xylem Inc. completed a $1.5 billion public offering of senior unsecured notes, issuing three tranches maturing in 2029, 2032, and 2037 with coupons ranging from 5.250% to 5.850%. The notes, sold under an existing shelf regis...
Business Operations and StrategyPrivate Placements and Financing
Xylem Establishes New Sustainability-Linked $1.5B Credit Facility
Positive
Sep 9, 2026
On September 8, 2026, Xylem Inc. entered into a new five-year senior unsecured revolving credit facility of up to $1.5 billion, available in U.S. dollars and euros, arranged by a syndicate of major banks and expandable to $2 billion. The facility,...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Xylem Appoints New CFO, Reaffirms 2026 Guidance
Positive
Aug 18, 2026
On August 18, 2026, Xylem announced that Andrea van der Berg has been appointed Executive Vice President and Chief Financial Officer, effective September 1, 2026, succeeding William “Bill” Grogan, who will remain through mid-September ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.