Research Analysts’ Weekly Ratings Updates for Xylem (XYL)

Several analysts have recently updated their ratings and price targets for Xylem (NYSE: XYL):

  • 5/14/2019 – Xylem was downgraded by analysts at Cowen Inc from an “outperform” rating to a “market perform” rating. They now have a $72.00 price target on the stock, down previously from $75.00.
  • 5/14/2019 – Xylem was downgraded by analysts at ValuEngine from a “buy” rating to a “hold” rating.
  • 5/3/2019 – Xylem had its price target lowered by analysts at Stifel Nicolaus from $93.00 to $89.00. They now have a “buy” rating on the stock.
  • 5/3/2019 – Xylem was upgraded by analysts at Janney Montgomery Scott from a “neutral” rating to a “buy” rating. They now have a $86.00 price target on the stock.
  • 4/23/2019 – Xylem was upgraded by analysts at ValuEngine from a “hold” rating to a “buy” rating.
  • 4/16/2019 – Xylem had its price target raised by analysts at Stifel Nicolaus from $80.00 to $93.00. They now have a “buy” rating on the stock.
  • 4/13/2019 – Xylem was upgraded by analysts at Zacks Investment Research from a “sell” rating to a “hold” rating. According to Zacks, “Xylem believes that solid sales in utilities, industrial and commercial end-markets will benefit its top-line performance in the quarters ahead. This along with pricing and productivity initiatives will continue to boost profitability. For 2019, the company anticipates adjusted earnings of $3.20-$3.40 per share, up 11-18% year over year at the mid-point. Revenues are projected to increase 2-4% year over year to $5.3-$5.4 billion, with organic sales increasing 4-6% on the back of strengthening end-markets. However, material price inflation on account of tariffs might dent bottom-line performance. Also, foreign exchange headwind also remains a cause of concern, with 5 cents per share of headwinds expected in 2018. Year to date, the company's shares have underperformed the industry and also look relatively overvalued.”
  • 4/5/2019 – Xylem was downgraded by analysts at Zacks Investment Research from a “hold” rating to a “sell” rating. According to Zacks, “Year to date, Xylem's shares have underperformed the industry and look comparatively overvalued. In 2018, the company's cost of sales increased 11.2% year over year, and selling, general and administrative expenses expanded 6.6%. Also, research and development expenses increased 4.4%. Notably, cost inflation in the year adversely impacted adjusted operating margin by 2.7 percentage points. We believe that further escalation in costs, if unchecked, can severely impact Xylem's margins and profitability. Further, headwinds arising from unfavorable movements in foreign currencies (which diluted earnings by 5 cents per share in 2018) and high debts remain concerns. In the past 60 days, earnings estimates for the company have been decreased for 2019 and 2020.”
  • 3/29/2019 – Xylem was downgraded by analysts at Janney Montgomery Scott from a “buy” rating to a “neutral” rating.
  • 3/22/2019 – Xylem had its “buy” rating reaffirmed by analysts at Boenning Scattergood. They wrote, “We met with Xylem sales and engineering staff this week at a significant industry event for the analytics platform within the company’s Measurement & Control Solutions business. Overall, the discussions affirmed our positive thesis on the stock, with the show highlighting Xylem’s unique combination of best-in-class commercial execution, robust innovation pipeline, and attractive underlying markets. The 2020 margin target has been a focus for investors, but we believe improved profitability in the MCS segment will enable Xylem to approach the low end, and the Pittcon feedback affirms this view. Our $92 target (up from $82) reflects a forward P/E of 24 times, in-line with the water infrastructure peer group average.””

Shares of XYL opened at $75.22 on Monday. The stock has a market capitalization of $13.53 billion, a P/E ratio of 26.12, a price-to-earnings-growth ratio of 1.41 and a beta of 1.15. Xylem Inc has a one year low of $60.65 and a one year high of $84.41. The company has a quick ratio of 1.02, a current ratio of 1.44 and a debt-to-equity ratio of 0.73.

Xylem (NYSE:XYL) last issued its quarterly earnings results on Thursday, May 2nd. The industrial products company reported $0.52 EPS for the quarter, missing analysts’ consensus estimates of $0.58 by ($0.06). The business had revenue of $1.24 billion during the quarter, compared to analysts’ expectations of $1.25 billion. Xylem had a net margin of 10.50% and a return on equity of 19.46%. The company’s revenue for the quarter was up 1.6% on a year-over-year basis. During the same period in the prior year, the company posted $0.51 EPS. On average, research analysts anticipate that Xylem Inc will post 3.24 EPS for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Thursday, June 27th. Investors of record on Thursday, May 30th will be issued a $0.24 dividend. This represents a $0.96 dividend on an annualized basis and a yield of 1.28%. The ex-dividend date of this dividend is Wednesday, May 29th. Xylem’s dividend payout ratio is currently 33.33%.

In other Xylem news, SVP Claudia S. Toussaint sold 2,344 shares of the stock in a transaction that occurred on Wednesday, May 1st. The stock was sold at an average price of $83.71, for a total transaction of $196,216.24. Following the transaction, the senior vice president now owns 46,105 shares of the company’s stock, valued at approximately $3,859,449.55. The transaction was disclosed in a document filed with the SEC, which is available at this link. Also, insider Tomas Brannemo sold 559 shares of the stock in a transaction that occurred on Thursday, February 21st. The stock was sold at an average price of $74.44, for a total value of $41,611.96. Following the transaction, the insider now directly owns 10,568 shares in the company, valued at approximately $786,681.92. The disclosure for this sale can be found here. Insiders sold 68,460 shares of company stock valued at $5,403,327 in the last three months. 0.85% of the stock is currently owned by company insiders.

A number of large investors have recently added to or reduced their stakes in XYL. Legal & General Group Plc lifted its holdings in Xylem by 10.6% during the 3rd quarter. Legal & General Group Plc now owns 950,436 shares of the industrial products company’s stock worth $75,911,000 after buying an additional 91,099 shares during the last quarter. Federated Investors Inc. PA lifted its holdings in Xylem by 472.9% during the 3rd quarter. Federated Investors Inc. PA now owns 118,947 shares of the industrial products company’s stock worth $9,501,000 after buying an additional 98,184 shares during the last quarter. DNB Asset Management AS lifted its holdings in Xylem by 1.9% during the 4th quarter. DNB Asset Management AS now owns 36,490 shares of the industrial products company’s stock worth $2,435,000 after buying an additional 671 shares during the last quarter. Meeder Asset Management Inc. lifted its holdings in Xylem by 5,057.1% during the 4th quarter. Meeder Asset Management Inc. now owns 722 shares of the industrial products company’s stock worth $48,000 after buying an additional 708 shares during the last quarter. Finally, Mitsubishi UFJ Asset Management UK Ltd. lifted its holdings in Xylem by 11.3% during the 4th quarter. Mitsubishi UFJ Asset Management UK Ltd. now owns 51,200 shares of the industrial products company’s stock worth $3,416,000 after buying an additional 5,200 shares during the last quarter. 86.94% of the stock is currently owned by institutional investors.

Xylem Inc engages in the design, manufacture, and servicing of engineered products and solutions for the water and wastewater applications. It operates in three segments: Water Infrastructure, Applied Water, and Measurement & Control Solutions. The Water Infrastructure segment offers various products, including water and wastewater pumps; controls and systems; filtration, disinfection, and biological treatment equipment; and mobile dewatering equipment under the Flygt, Godwin, Wedeco, Sanitaire, and Leopold names for the transportation and treatment of water.

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