Xylem stock reaction to Evoqua deal ‘confounding,’ says Stifel

Stifel analyst Nathan Jones the analyst tells investors in a research note that the market reaction to Xylem’s (XYL) proposed deal to buy Evoqua (AQUA) in an all-stock transaction that reflects an implied enterprise value of approximately $7.5B is "confounding." The deal could provide investors with a potential near-term opportunity and the firm says the current dislocation doesn’t appear warranted. Stifel, which made no change to the firm’s Hold rating on Xylem shares, thinks there will be meaningful revenue synergies created by the transaction.