Xylem Inc. (XYL) is a leading global water-technology company that designs, manufactures, and services engineered products and solutions for public utilities, industrial, residential, commercial, and agricultural clients worldwide. Headquartered in Washington, District of Columbia, the company operates through key segments such as Water Infrastructure; Applied Water; Measurement & Control Solutions; and Water Solutions & Services. It has a market cap of $33.7 billion. Companies worth $10 billion or more a ...

Core Insights - Flocean, a Norwegian subsea desalination company, has been recognized as a TIME Best Invention of 2025 [1] - The company has extended its total Series A funding to $22.5 million (NOK 228 million) [1] - Xylem Inc. has joined as a strategic investor in this funding round, alongside existing investors and new investors [1] Funding Details - The Series A funding extension amounts to $22.5 million (NOK 228 million) [1] - New strategic investor Xylem Inc. (NYSE: XYL) has been added to the list of backers [1] - Existing investors include Burnt Island Ventures, Freebird Capital, Katapult Ocean, and Nysnø Climate Investments, with new investors such as Ari Emanuel, Orion, Rypples, and Wellers Impact's Water Unite Impact Fund [1]

Core Points - Xylem Inc. has declared a fourth quarter dividend of $0.40 per share, payable on December 23, 2025, to shareholders of record as of November 25, 2025 [1] - Xylem is a leading global water solutions company with 23,000 employees and reported revenue of $8.6 billion in 2024 [2] - The company reported third-quarter 2025 revenue of $2.3 billion, with earnings per share increasing by 4% on a reported basis and 23% on an adjusted basis [5] Company Overview - Xylem Inc. is a Fortune 500 company focused on water solutions, aiming to create a more water-secure world [2] - The company emphasizes innovation and expertise in optimizing water and resource management [2] Financial Performance - In 2024, Xylem achieved total revenue of $8.6 billion, showcasing strong execution and demand [2] - For the third quarter of 2025, the company reported revenue of $2.3 billion, indicating robust performance [5] - Earnings per share for the third quarter increased by 4% on a reported basis and 23% on an adjusted basis, reflecting effective management and operational execution [5]

Industry Overview - The U.S. Business Services Sector is supported by strong domestic economic fundamentals, encompassing companies that provide consulting, staffing, financial transactions, outsourcing, advertising, waste removal, building maintenance, technology services, and auction/valuation services [1] - The sector has evolved into a mature and resilient ecosystem, with revenues, income, and cash flows now above pre-pandemic levels [2] - The rapid advancement and adoption of artificial intelligence and automation technologies are reshaping the delivery of business services [2] Sector Performance - The Zacks-defined Business Services Sector ranks in the top 38% of the Zacks Sector Rank, indicating an expectation to outperform the market over the next three to six months [3] Recommended Stocks - Five business services stocks with favorable Zacks Rank are recommended: Xylem Inc. (XYL), Thomson Reuters Corp. (TRI), UL Solutions Inc. (ULS), Omnicom Group Inc. (OMC), and Veralto Corp. (VLTO), all carrying a Zacks Rank 2 (Buy) [4] Company Insights Xylem Inc. (XYL) - Xylem experiences steady demand due to the essential nature of its offerings, benefiting from robust demand for smart metering and applications in the U.S. [5] - The Water Infrastructure unit's performance is boosted by growth in transport and treatment application businesses, with an expected revenue growth rate of 3.7% and earnings growth rate of 9.6% for next year [6] Thomson Reuters Corp. (TRI) - Thomson Reuters is a leading provider of value-added information and technology across various sectors, including law, tax, accounting, and healthcare [7] - The company has an expected revenue growth rate of 7.8% and earnings growth rate of 14.2% for next year [8] UL Solutions Inc. (ULS) - UL Solutions provides safety science services across multiple segments, including Industrial, Consumer, and Software and Advisory [9] - The company has an expected revenue growth rate of 5.4% and earnings growth rate of 6.5% for next year [10] Omnicom Group Inc. (OMC) - Omnicom Group's diverse portfolio across traditional and digital marketing segments ensures revenue stability and adaptability [11] - The company has an expected revenue growth rate of 3.2% and earnings growth rate of 6.9% for next year [13] Veralto Corp. (VLTO) - Veralto is positioned for growth through U.S. infrastructure investments and rising semiconductor demand, with a strong focus on water quality and product quality segments [14][15] - The company has an expected revenue growth rate of 5.8% and earnings growth rate of 9.3% for next year [17]

Company Performance - Xylem Inc. (XYL) has shown a strong performance, with a year-to-date increase of 30% [1] - The company has maintained momentum, rising 15% over the past three months and 4.7% in the last month [1] - This growth is primarily attributed to higher margins and better-than-expected growth [1] Market Analysis - The market is beginning to recognize the potential of Xylem Inc. as it continues to perform well [1]

Core Viewpoint - The investment outlook for Xylem Inc. (XYL) remains positive due to strong secular tailwinds, successful integration of Evoqua, and a promising PFAS funding pipeline [1] Group 1: Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - The analysis is based on a bottom-up approach, examining the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - The investment outlook for Xylem Inc. (XYL) remains positive due to strong secular tailwinds, successful integration of Evoqua, and a promising PFAS funding pipeline [1] Group 1: Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - The strategy is based on bottom-up analysis, emphasizing the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Group 1: Water Stocks Overview - Water stocks are shares of companies involved in the supply, treatment, transport, storage, or management of water, including utilities, infrastructure firms, and technology providers [2] - Investors view water stocks as a way to gain exposure to a regulated sector with long-term demand driven by population growth, urbanization, and water scarcity [2] - The companies mentioned had the highest dollar trading volume among water stocks recently [2] Group 2: NuScale Power - NuScale Power Corporation develops and sells modular light water reactor nuclear power plants for various applications, including electrical generation and desalination [3] - The company offers the NuScale Power Module (NPM), which generates 77 megawatts of electricity (MWe), and designs for power plants that can house multiple NPMs [3] Group 3: Coca-Cola - The Coca-Cola Company manufactures and sells a variety of nonalcoholic beverages globally, including soft drinks, water, sports drinks, coffee, tea, and juices [4] Group 4: Ecolab - Ecolab Inc. provides water, hygiene, and infection prevention solutions, operating through three segments: Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences [5] - The Global Industrial segment focuses on water treatment and cleaning solutions for various industries, including food and beverage processing and power generation [5] Group 5: Xylem - Xylem Inc. designs, manufactures, and services engineered products and solutions, operating through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services [6] - The Water Infrastructure segment offers products such as pumps, filtration, disinfection equipment, and mobile dewatering services [6] Group 6: American Water Works - American Water Works Company, Inc. provides water and wastewater services to approximately 1,700 communities across 14 states, serving around 3.5 million active customers [8] - The company serves various customer segments, including residential, commercial, industrial, and public authorities [8]

Core Viewpoint - Xylem's shares have shown strong performance, with a 29.7% increase year-to-date, outperforming both the Zacks Business Services sector and the Zacks Waste Removal Services industry [1] Financial Performance - Xylem has consistently exceeded earnings expectations, reporting EPS of $1.37 against a consensus estimate of $1.24 in its latest earnings report [2] - For the current fiscal year, Xylem is projected to achieve earnings of $4.84 per share on revenues of $8.96 billion, reflecting a 13.35% increase in EPS and a 4.7% increase in revenues [3] - The next fiscal year forecasts earnings of $5.37 per share on revenues of $9.41 billion, indicating year-over-year changes of 11.12% in EPS and 5.01% in revenues [3] Valuation Metrics - Xylem's current valuation metrics show a Price-to-Earnings (P/E) ratio of 31.1X for the current fiscal year, slightly below the peer industry average of 31.8X [7] - On a trailing cash flow basis, the stock trades at 22.8X compared to the peer group's average of 15.4X, and it has a PEG ratio of 2.56, which does not place it among the top value stocks [7] Style Scores - Xylem has a Value Score of C, a Growth Score of B, and a Momentum Score of A, resulting in a combined VGM Score of B [6] Zacks Rank - Xylem holds a Zacks Rank of 2 (Buy), supported by a positive earnings estimate revision trend, indicating potential for further gains [8]

Core Insights - Xylem Inc. is a leading global water technology company specializing in innovative solutions for water and wastewater applications [1] - The company reported strong financial performance, with revenue and earnings per share exceeding market expectations [2][3][4] Financial Performance - For the quarter ending September 2025, Xylem reported revenue of $2.27 billion, representing a 7.8% year-over-year increase and surpassing the Zacks Consensus Estimate of $2.22 billion, resulting in a positive surprise of 1.98% [3][6] - The earnings per share (EPS) for the same quarter were reported at $1.37, an increase from $1.11 in the previous year, exceeding the consensus EPS estimate of $1.24 and delivering a surprise of 10.48% [4][6] Stock Performance - The current stock price of Xylem is $150.50, reflecting an increase of $1.10 or 0.74% [5] - Barclays has set a price target of $172 for Xylem, indicating a potential increase of approximately 14.29% from the current stock price [2][6] - The stock has fluctuated between $146.46 and $152.77 during the day, with $152.77 being the highest price over the past year [5]