Xylem price target lowered to $160 from $165 at Oppenheimer

Oppenheimer lowered the firm’s price target on Xylem (XYL) to $160 from $165 and keeps an Outperform rating on the shares. Counter the apparently deep-seated concerns of some investors, the firm views Xylem’s normalized organic growth and margin expansion trajectory as soundly intact, with the team’s balance sheet strength and capital deployment optionality broadly underappreciated. Xylem’s defensive/secular growth underpinning and self-help traction also screen well amid the uncertainties regarding the impact and duration of the Iran war, Oppenheimer argues. And as recently framed, the firm sees concerns regarding U.S. federal funding as materially overdone with high-level water and wastewater capex reads still favorable. All in, Oppenheimer believes investors should trust Xylem’s structural advantages, look beyond first-half noise, and buy into now-discounted valuation.