Xylem (XYL) NDR Takeaways Reveal Pricing Escalators Likely Cushion Recent Cost Increases - Morgan StanleyThe analyst stated "Inflation and component availability remain the most critical near term headwinds; while neither seem to be improving materially, they have not worsened either. XYL seems well-positioned to navigate choppiness. From a cost standpoint, stainless steel, freight, and energy are notable pain points, but inflation-related price actions are largely being accepted by customers. Updated pricing will continue to roll through results into 2H, and XYL reiterated that roughly half of its guided 4-6% revenue growth target is price-related. The greatest headwind to near-term revenue continues to be chip shortages, and XYL has not seen lead times improve for procurement thus far. Product redesign, where possible, may help ease constraints, but XYLs ability to convert backlog is still contingent on normalizing component supply. Critically, XYLs long term MCS contracts typically include CPI-related pricing escalators, so deferred revenue will not likely be dilutive to margins."