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Xylem
(NYSE:XYL)
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Rating:65Neutral
Price Target:
$117.00
â–¼(-3.39% Downside)
Action:Reiterated
Date:05/30/26
The score is driven primarily by solid financial performance (improving margins, strong free cash flow, and low leverage), tempered by a sharp TTM revenue decline and weaker cash conversion. Technicals are a notable drag with the stock in a clear downtrend and negative momentum. Valuation is somewhat rich versus the modest dividend yield, while the earnings call supports the outlook via reaffirmed growth and margin expansion guidance despite near-term China and timing headwinds.
Positive Factors
Improving Profitability
Sustained margin improvement indicates structural operating leverage from mix, cost discipline, and pricing. Higher gross and EBIT margins increase resilience to cyclical revenue swings and support durable earnings power and investment capacity over the next 2–6 months.
Negative Factors
Sharp TTM Revenue Decline
A near‑23% trailing revenue drop reflects meaningful demand or timing disruption that can pressure management's growth targets and make margin improvements harder to sustain. Restoring top‑line trajectory is needed to convert margin gains into lasting earnings growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving Profitability
Sustained margin improvement indicates structural operating leverage from mix, cost discipline, and pricing. Higher gross and EBIT margins increase resilience to cyclical revenue swings and support durable earnings power and investment capacity over the next 2–6 months.
Read all positive factors
Xylem Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down income from various business segments, revealing which parts of the company are driving growth and where there may be challenges.
Breaks down income from various business segments, revealing which parts of the company are driving growth and where there may be challenges.
Data provided by:
The Fly
The FlyXylem (XYL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.26B
Dividend Yield1.15%
Average Volume (3M)1.91M
Price to Earnings (P/E)30.2
Beta (1Y)0.91
Revenue Growth5.64%
EPS Growth8.05%
CountryUS
Employees22,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)4.02
Shares Outstanding237,693,500
10 Day Avg. Volume1,719,629
30 Day Avg. Volume1,906,275
Financial Highlights & Ratios
PEG Ratio4.89
Price to Book (P/B)2.89
Price to Sales (P/S)3.67
P/FCF Ratio36.42
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue3.02
Enterprise Value/Gross Profit7.83
Enterprise Value/Ebitda15.24
Forecast
1Y Price Target
$148.33Price Target Upside22.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)5.54
Revenue Forecast (FY)$9.26B
Xylem Business Overview & Revenue Model
Company Description
Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for utility, industrial, and residential and commercial building services settings worldwide. It operates through Wa...
How the Company Makes Money
Xylem makes money primarily by selling water-related equipment, systems, and associated services to utilities, industrial customers, commercial building operators, and other water end users. A major revenue stream comes from product sales—such as ...
Xylem Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a cautiously optimistic tone: the company delivered stable top-line results and improved profitability in Q1, reported notable commercial achievements (strong backlog, book-to-bill >1, a record $850M WSS contract), executed meaningful shareholder returns (>$580M buybacks, dividend increase), and advanced strategic M&A to enhance analytics capabilities. Offsetting these positives were material near-term headwinds: flat revenue and orders overall, a sharp ~30% decline in China (a concentrated near-term drag), MCS timing and margin pressure, and impacts from 80/20 simplification actions. Management maintained full-year organic growth guidance (2%–4%) and raised reported revenue guidance modestly while projecting margin expansion, signaling confidence in a stronger back half. Given the weight of the operational and financial positives, balanced against distinct near-term regional and timing challenges, the call leans positive.Positive Updates
Solid Q1 Profitability and EPS Growth
Q1 adjusted EBITDA margin of 20.6%, up 20 basis points year-over-year; GAAP/adjusted EPS of $1.12, a 9% increase versus prior year.
Negative Updates
Revenue and Orders Largely Flat
Company-wide revenue and orders were flat year-over-year in Q1, reflecting near-term pacing and project timing rather than growth acceleration.
Read all updates
Q1-2026 Updates
Positive
Negative
Solid Q1 Profitability and EPS Growth
Q1 adjusted EBITDA margin of 20.6%, up 20 basis points year-over-year; GAAP/adjusted EPS of $1.12, a 9% increase versus prior year.
Read all positive updates
Company Guidance
Xylem reaffirmed a constructive 2026 outlook, guiding full‑year reported revenue of $9.2–$9.3 billion (up from $9.1–$9.2B) implying 2–3% reported growth and unchanged organic growth of 2–4%, with adjusted EBITDA margin of 22.9–23.3% (70–110 bps expansion vs. prior year) and EPS unchanged at $5.35–$5.60. For Q2 management expects reported revenue growth of 2–3% (roughly 1% organic), EBITDA margin of ~22–22.5% (up 20–70 bps) and EPS of $1.31–$1.36; they noted MCS EBITDA will be down year‑over‑year in Q2 but improve sequentially and return to margin expansion in H2 (exiting the year post‑divestiture well in excess of 25% EBITDA). Quarterly and balance‑sheet context: Q1 revenue was flat, Q1 EBITDA margin was 20.6% and Q1 EPS was $1.12 (+9%), backlog ended at $4.7 billion with book‑to‑bill >1, net debt/adjusted EBITDA was 0.6x after $581M of buybacks under a $1.5B repurchase authorization, free cash flow was positive with a long‑term target of low‑double‑digit FCF margin, and the metering divestiture is now expected to close at the end of Q2.Xylem Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.09B | 9.04B | 8.56B | 7.36B | 5.52B | 5.20B |
| Gross Profit | 3.51B | 3.48B | 3.21B | 2.72B | 2.08B | 1.98B |
| EBITDA | 1.80B | 1.78B | 1.69B | 1.12B | 726.00M | 832.00M |
| Net Income | 973.00M | 957.00M | 890.00M | 609.00M | 355.00M | 427.00M |
Balance Sheet | ||||||
| Total Assets | 16.95B | 17.63B | 16.49B | 16.11B | 7.95B | 8.28B |
| Cash, Cash Equivalents and Short-Term Investments | 808.00M | 1.48B | 1.12B | 1.02B | 944.00M | 1.35B |
| Total Debt | 2.06B | 2.06B | 2.13B | 2.39B | 1.95B | 2.51B |
| Total Liabilities | 5.72B | 5.88B | 5.62B | 5.94B | 4.45B | 5.05B |
| Stockholders Equity | 10.97B | 11.48B | 10.64B | 10.17B | 3.49B | 3.22B |
Cash Flow | ||||||
| Free Cash Flow | 966.00M | 910.00M | 942.00M | 566.00M | 388.00M | 330.00M |
| Operating Cash Flow | 1.32B | 1.24B | 1.26B | 837.00M | 596.00M | 538.00M |
| Investing Cash Flow | -532.00M | -471.00M | -482.00M | -628.00M | -191.00M | -183.00M |
| Financing Cash Flow | -1.07B | -501.00M | -615.00M | -157.00M | -790.00M | -855.00M |
Xylem Technical Analysis
Positive
121.11
Price Trends
112.56
Positive
117.98
Positive
129.49
Negative
Market Momentum
2.29
Negative
66.54
Neutral
72.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XYL, the sentiment is Positive. The current price of 121.11 is above the 20-day moving average (MA) of 115.03, above the 50-day MA of 112.56, and below the 200-day MA of 129.49, indicating a neutral trend. The MACD of 2.29 indicates Negative momentum. The RSI at 66.54 is Neutral, neither overbought nor oversold. The STOCH value of 72.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XYL.
Xylem Risk Analysis
Xylem disclosed 24 risk factors in its most recent earnings report. Xylem reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Xylem Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $11.62B | 32.14 | 18.38% | 0.70% | 14.22% | 25.22% | |
75 Outperform | $15.96B | 30.61 | 17.12% | 1.64% | 7.37% | 20.50% | |
72 Outperform | $17.25B | 34.32 | 13.03% | 0.79% | 16.63% | -9.75% | |
69 Neutral | $8.91B | 26.11 | 15.93% | 1.17% | 0.83% | 26.77% | |
66 Neutral | $12.05B | 18.65 | 17.74% | 0.96% | 3.10% | 4.96% | |
65 Neutral | $28.26B | 30.20 | 8.70% | 1.15% | 5.64% | 8.05% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
XYL
Xylem
121.22
-8.07
-6.24%
FLS
Flowserve
70.48
18.19
34.78%
ITT
ITT
195.00
38.21
24.37%
NDSN
Nordson
286.60
71.00
32.93%
PNR
Pentair
76.19
-29.47
-27.89%
WTS
Watts Water Technologies
352.36
101.52
40.47%
Xylem Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Xylem Completes $1 Billion Senior and Blue Notes Offering
Positive
May 29, 2026
On May 29, 2026, Xylem Inc. completed a $1 billion public debt offering consisting of $500 million of 5.200% Senior Notes due 2033 and $500 million of 5.450% Senior Blue Notes due 2036, both issued as senior unsecured obligations under its existin...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Xylem Shareholders Endorse Board, Pay and Stock Plan
Positive
May 18, 2026
On May 14, 2026, Xylem Inc. held its 2026 Annual Meeting of Shareholders, with 88.12% of outstanding shares represented, and shareholders elected nine directors to one-year terms, reaffirming the current board composition. Investors also ratified ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.