Core Viewpoint - Xylem (XYL) is positioned well to continue its trend of beating earnings estimates, having surpassed expectations in its last two quarterly reports [1][2]. Earnings Performance - Xylem has recorded an average earnings surprise of 4.99% over the last two quarters, with the most recent quarter showing a surprise of 2.83% (actual earnings of $1.09 per share vs. expected $1.06) and the previous quarter a surprise of 7.14% (actual $0.90 vs. expected $0.84) [1][2]. Earnings Estimates - Estimates for Xylem have been trending higher, supported by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +0.10%, indicating bullish sentiment among analysts regarding its near-term earnings potential [2][3]. Zacks Rank and Predictive Power - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with research indicating that such combinations result in positive surprises nearly 70% of the time [2][3]. Upcoming Earnings Report - Xylem's next earnings report is anticipated to be released on October 31, 2024, and the positive Earnings ESP indicates potential for continued strong performance [3].

Xylem Inc. (XYL) is well-poised for growth in the coming quarters, courtesy of its businesses and accretive acquisitions. The company's efforts to reward its shareholders add to its appeal. Headquartered in Rye Brook, NY, Xylem is one of the leading providers of water solutions worldwide. It is involved in the full water-process cycle, including the collection, distribution and return of water to the environment. XYL has a significant presence in the United States, the Asia Pacific, Europe and various other ...

onuma Inthapong/E+ via Getty Images Xylem Inc. (NYSE:XYL) has been performing well over the past 12 months, with the share price increasing 45% since November 2023. In this article, I considered reviewing Xylem's recent financial performance, with a focus on the headwinds and pressures that the company is currently facing, including a significant decline in orders in their water infrastructure segment due to delays in large infrastructure projects in China. In my view, shareholders have fully priced in the ...

LEXINGTON, Ky., Sept. 6, 2024 /PRNewswire/ -- ElectraMet® has entered into a memorandum of understanding with Xylem Inc. (NYSE: XYL) to explore collaboration on scalable peroxide and metals removal solutions for North American lithium-ion battery recyclers and microelectronics manufacturers. The potential solutions will leverage ElectraMet's technology for the targeted removal and recovery of metals, as well as peroxide abatement – crucial deliverables in microelectronics waste treatment and battery recycli ...

Core Insights - An analyst downgrade from buy to hold has led to a nearly 5% decline in Xylem's stock, raising concerns about earnings momentum and valuation [1] - Despite the downgrade, the water technology sector has performed well this year, with companies like Badger Meter and Xylem benefiting from increased spending by water utilities on technology solutions [2][3] Company Performance - Xylem is currently trading at 30 times its expected earnings, prompting questions about future stock performance [4] - The current valuation, while high, is not unusual for Xylem, and a lower interest rate environment could positively impact utility and residential spending [4] Market Outlook - The unexpected strength in water utility spending indicates significant growth potential in smart meters and technology aimed at reducing leakage and improving water infrastructure [3] - The recent stock dip may present a buying opportunity for investors [5]

Core Viewpoint - Xylem's recent earnings report shows strong performance with adjusted earnings and revenues exceeding expectations, leading to an optimistic outlook for 2024 [2][9]. Financial Performance - Adjusted earnings for Q2 2024 were $1.09 per share, surpassing the Zacks Consensus Estimate of $1.06, and increased by 11% year over year [2]. - Revenues reached $2.17 billion, beating the consensus estimate of $2.16 billion, and reflecting a 26% year-over-year increase driven by strong demand and operational execution [2]. - Orders totaled $2.09 billion, marking a 12% increase year over year, although organic orders decreased by 1% [3]. Segment Performance - Water Infrastructure segment revenues were $631 million, up 22% year over year, with organic sales increasing by 7% [4]. - Applied Water segment revenues were $456 million, down 5% year over year, with organic sales falling by 4% due to market softness [4]. - Measurement & Control Solutions segment revenues reached $482 million, up 26% year over year, driven by smart metering demand [5]. - Water Solutions and Services segment revenues were $600 million, up 76% year over year, with organic sales increasing by 12% [5]. Margin and Cash Flow - Adjusted EBITDA was $452 million, a 37.3% increase from the previous year, with a margin improvement to 20.8% [6]. - Adjusted operating income was $352 million, up 35.9% year over year, with an operating margin increase to 16.2% [6]. - Cash and cash equivalents at the end of Q2 were $815 million, down from $1.02 billion at the end of December 2023, while long-term debt decreased to $1.98 billion [7]. Capital Expenditure and Shareholder Returns - Capital expenditure was $147 million, a 42.7% increase from the previous year, with free cash flow of $230 million compared to a cash outflow of $61 million in the prior year [8]. - Dividends paid in the first half of 2024 totaled $175 million, up 25.9% year over year, and share buybacks amounted to $18 million [8]. 2024 Guidance - Xylem expects revenues of approximately $8.55 billion for 2024, indicating a 16% increase from the prior year [9]. - Adjusted EBITDA margin is projected to be around 20.5%, reflecting a 160 basis point expansion from the previous year [9]. - Adjusted earnings are forecasted to be in the range of $4.18-$4.28 per share, an increase from $3.78 per share in 2023 [10].

Xylem Inc. (XYL) is witnessing growth across most of its businesses. The Measurement & Control Solutions (M&CS) segment is benefiting from the robust demand for advanced technology solutions like smart metering and other applications, primarily in the United States. The segment's organic sales were up 26% year over year, driven by smart metering demand and execution. Growth in the transport application business, driven by a strong pipeline of capital projects in Western Europe and increased infrastructure p ...

Investment Rating - The report initiates coverage of Xylem Inc with a Buy rating and a price target of $165, indicating a favorable outlook for the company [1][5][9]. Core Viewpoints - Xylem Inc is positioned as the leading pure-play water company, expected to achieve a mid-single-digit (MSD+) growth profile, which is less cyclical compared to peers. The company has a margin expansion opportunity of approximately 100 basis points per year [1][5][9]. - The growth outlook is supported by several secular trends, including aging water infrastructure, government funding for upgrades, stricter regulations on water quality, and global urbanization [3][5][25]. - The company generated approximately $7.4 billion in sales for FY23, with a diverse product suite that includes water flow, test and measurement, and treatment/filtration equipment [7][9]. Summary by Sections Investment Thesis - Xylem is expected to benefit from substantial demand for replacement and new equipment due to aging infrastructure in developed economies, supported by government funding and regulations addressing water contamination [3][5][25]. - The company is projected to achieve a sales compound annual growth rate (CAGR) of around 6% through 2028, which is above the market's expectations [3][5][27]. Financial Projections - Revenue projections for Xylem are as follows: $8.6 billion in 2024, $9.0 billion in 2025, and $9.6 billion in 2026, with net earnings expected to reach $1.0 billion in 2024 and $1.2 billion in 2025 [1][12]. - The report anticipates an EBITDA margin improvement from 16% in 2024 to 20% by 2028, reflecting the company's operational efficiency and strategic pricing actions [4][12]. Market Drivers - Key market drivers include the estimated $625 billion funding need for national drinking water infrastructure over the next 20 years, with over $50 billion allocated by the Bipartisan Infrastructure Law for improvements [6][26]. - Urbanization trends indicate that approximately 68% of the global population will live in urban areas by 2050, increasing the demand for water infrastructure and treatment solutions [6][26]. Competitive Positioning - Xylem's balance sheet is strong, with a net debt to EBITDA ratio of 0.7x, positioning the company favorably against its peers [5][11]. - The company is currently trading at a premium compared to its peers, reflecting its higher growth potential and lower cyclicality [14][18].

Xylem beat second-quarter estimates, but investors were not impressed. As a result, the stock finished the day down 5.7% on Tuesday. Revenue in the quarter jumped 26% or 9% organically, reaching $2.17 billion and topping estimates of $2.14 billion. The organic results exclude the impact of its acquisition of Evoqua Water Technologies. What's next for Xylem Xylem might have gained on today's news, but the stock was already up roughly 20% year to date and trades at a forward price-to-earnings ratio of more th ...

Core Insights - Xylem Inc. reported revenues of $2.17 billion, exceeding the consensus estimate of $2.16 billion, with a year-over-year increase of 26% driven by strong demand and operational execution [1] - Adjusted earnings per share for the second quarter of 2024 were $1.09, surpassing the Zacks Consensus Estimate of $1.06, reflecting an 11% increase year over year [11] - The company expects revenues of approximately $8.55 billion for 2024, indicating a 16% increase from the previous year [19] Segment Performance - The Applied Water segment generated revenues of $456 million, down 5% year over year, impacted by softness in developed markets [2] - Water Solutions and Services segment revenues totaled $600 million, up 76% year over year, driven by large long-term outsourced water contracts [3] - Water Infrastructure segment revenues reached $631 million, up 22% year over year, supported by price realization and growth across regions [13] - Measurement & Control Solutions segment revenues were $482 million, up 26% year over year, driven by smart metering demand [14] Financial Metrics - Adjusted EBITDA was $452 million, a 37.3% increase from the previous year, with an adjusted EBITDA margin improvement to 20.8% [4] - Net cash generated from operating activities in the first half of 2024 was $377 million, compared to $9 million in the same period last year [5] - Adjusted operating income was $352 million, up 35.9% year over year, with an adjusted operating margin of 16.2% [15] Shareholder Returns - In the first half of 2024, Xylem paid dividends of $175 million, a 25.9% increase year over year, and repurchased shares worth $18 million [18] - Capital expenditure was $147 million, up 42.7% from the previous year, while free cash flow was $230 million compared to a cash outflow of $61 million in the prior year [17] Future Guidance - The company forecasts adjusted earnings in the range of $4.18-$4.28 per share for 2024, an increase from $3.78 per share in 2023 [20] - Adjusted EBITDA margin is expected to be approximately 20.5%, indicating an expansion of 160 basis points from the previous year [7]