Xylem: A Strong Buy for Long-Term Growth in Water Technology Sector

Xylem (XYL) has received a new Buy rating, initiated by J.P. Morgan analyst, Mark Strouse.

Mark Strouse has given his Buy rating due to a combination of factors that highlight Xylem’s strong position in the water technology sector. Xylem is recognized as a leader in this industry, offering investors a unique opportunity to gain exposure to diverse water end markets that are supported by long-term growth trends. These include challenges related to water scarcity, aging infrastructure, and environmental regulations such as PFAS mitigation. The company’s ongoing efforts to simplify its operations through initiatives like the 80/20 strategy are expected to enhance its structural margins and competitive edge.
Moreover, Xylem’s current market valuation presents an attractive entry point, as it trades at a discount compared to its historical averages. The company’s scarcity value as one of the few publicly traded pure-play water technology firms, combined with its robust balance sheet and potential for margin expansion, justifies a premium valuation. Strouse’s price target of $148 by the end of 2025 reflects confidence in Xylem’s ability to outperform market expectations and capitalize on its strategic initiatives.

According to TipRanks, Strouse is a 4-star analyst with an average return of 3.3% and a 43.46% success rate. Strouse covers the Technology sector, focusing on stocks such as SolarEdge Technologies, Sunrun, and Canadian Solar.