Xylem Inc (XYL)
NYSE:XYL
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Xylem
(NYSE:XYL)
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Rating:68Neutral
Price Target:
$140.00
â–²(14.99% Upside)
Action:DowngradedDate:02/26/26
The score is led by strong underlying financial performance and constructive FY26 guidance for margin and EPS expansion. These positives are tempered by weak current technical momentum and a premium valuation, with additional near-term uncertainty from China weakness, project timing variability, and softer recent free-cash-flow growth.
Positive Factors
Multi-year Revenue Expansion
Nearly doubling revenue since 2020 reflects durable scale across municipal, industrial and service end markets. A larger installed base supports recurring aftermarket, parts and service revenue, smoothing cycles and underpinning long‑term earnings resilience beyond quarter-to-quarter volatility.
Negative Factors
China Market Weakness
Severe China weakness drives material headwinds in a key geography and segment. Given the size of the decline and notable order drops, recovery could take many quarters, reducing revenue diversification and making near‑term growth and backlog conversion more uncertain across the business.
Read all positive and negative factors
Positive Factors
Negative Factors
Multi-year Revenue Expansion
Nearly doubling revenue since 2020 reflects durable scale across municipal, industrial and service end markets. A larger installed base supports recurring aftermarket, parts and service revenue, smoothing cycles and underpinning long‑term earnings resilience beyond quarter-to-quarter volatility.
Read all positive factors
Xylem (XYL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$29.60B
Dividend Yield1.15%
Average Volume (3M)2.13M
Price to Earnings (P/E)34.6
Beta (1Y)1.02
Revenue Growth5.56%
EPS Growth13.76%
CountryUS
Employees23,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.42
Shares Outstanding243,141,400
10 Day Avg. Volume2,013,713
30 Day Avg. Volume2,134,342
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 Cap1.02
Enterprise Value/Revenue3.33
Enterprise Value/Gross Profit8.66
Enterprise Value/Ebitda16.87
Forecast
1Y Price Target
$160.55Price Target Upside31.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)5.5
Revenue Forecast (FY)$9.20B
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 the water and wastewater applications in the United States, Europe, the Asia Pacific, and internationally. It op...
How the Company Makes Money
Xylem generates revenue through multiple streams, primarily from the sale of its water technology products and services. Key revenue streams include the sale of pumps, treatment equipment, and related services, as well as recurring revenue from ma...
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 Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call conveyed a positive overall picture driven by record results, meaningful margin expansion, a strong balance sheet, and clear operational progress from the transformation program. Management acknowledged near-term top-line headwinds from accelerated 80/20 simplification, project timing variability (notably in smart metering) and significant China market weakness, all of which temper the near-term revenue cadence. Guidance projects modest organic growth in 2026 with continued margin expansion and EPS growth, indicating management expects the positive operating leverage and quality-of-earnings improvements to outweigh short-term revenue sacrifices.Positive Updates
Record Q4 and Full-Year Results
Delivered record revenue, EBITDA, and earnings per share for both Q4 and full year 2025. Q4 EPS was $1.42, up 20% year-over-year. Full-year revenue grew 5% with full-year EBITDA margin expanding 160 basis points to 22.2%; Q4 EBITDA margin was 23.2%, up 220 basis points versus prior year.
Negative Updates
Short-term Top-line Headwind from 80/20 Simplification
Management expects an outsized ~2% one-year top-line headwind in 2026 from accelerated 80/20 product/customer simplification (doubling the impact vs 2025) as lower-quality revenue is intentionally exited to improve long-term earnings quality.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Q4 and Full-Year Results
Delivered record revenue, EBITDA, and earnings per share for both Q4 and full year 2025. Q4 EPS was $1.42, up 20% year-over-year. Full-year revenue grew 5% with full-year EBITDA margin expanding 160 basis points to 22.2%; Q4 EBITDA margin was 23.2%, up 220 basis points versus prior year.
Read all positive updates
Company Guidance
The company guided to full-year 2026 revenue of $9.1–$9.2 billion (1–3% reported growth, 2–4% organic), adjusted EBITDA margin of roughly 22.9%–23.3% (up 70–110 bps vs. FY25’s 22.2%), and EPS of $5.35–$5.60 (≈+8% at the midpoint), while reiterating a long‑term commitment to low‑double‑digit free cash flow margin and progress on that in 2026. For Q1 they expect reported revenue growth of 1–2% (flat organic), EBITDA margin ~20.5–21.0% and EPS $1.06–$1.11; full‑year guidance assumes an outsized ~2% top‑line headwind from accelerated 80/20 simplification actions. Recent operating metrics underpin the outlook: year‑end backlog $4.6B (book‑to‑bill ~1), Q4 orders +7% (FY orders +2%), Q4 revenue +4% (FY +5%), Q4 adjusted EBITDA margin 23.2% (+220 bps YoY) and Q4 EPS $1.42 (+20% YoY); segment details include MCS backlog ~$1.4B (Q4 orders +22%, revenue +10%, EBITDA margin 20.2%), Water Infrastructure orders -1%/revenue flat (China down ~30%), Applied Water orders +5/revenue +3 (EBITDA up 60 bps; targeting ~20% in Q1), and WSS orders +7/revenue +4 (EBITDA 23.9%). Net debt/adjusted EBITDA was ~0.2x and YTD free cash flow was down ~2% as expected.Xylem Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
78
Positive
Cash Flow
66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 9.04B | 8.56B | 7.36B | 5.52B | 5.20B |
| Gross Profit | 3.48B | 3.21B | 2.72B | 2.08B | 1.98B |
| EBITDA | 1.78B | 1.69B | 1.12B | 726.00M | 832.00M |
| Net Income | 957.00M | 890.00M | 609.00M | 355.00M | 427.00M |
Balance Sheet | |||||
| Total Assets | 17.63B | 16.49B | 16.11B | 7.95B | 8.28B |
| Cash, Cash Equivalents and Short-Term Investments | 1.48B | 1.12B | 1.02B | 944.00M | 1.35B |
| Total Debt | 1.94B | 2.13B | 2.39B | 1.95B | 2.51B |
| Total Liabilities | 5.88B | 5.62B | 5.94B | 4.45B | 5.05B |
| Stockholders Equity | 11.48B | 10.64B | 10.17B | 3.49B | 3.22B |
Cash Flow | |||||
| Free Cash Flow | 910.00M | 942.00M | 566.00M | 388.00M | 330.00M |
| Operating Cash Flow | 1.24B | 1.26B | 837.00M | 596.00M | 538.00M |
| Investing Cash Flow | -471.00M | -482.00M | -628.00M | -191.00M | -183.00M |
| Financing Cash Flow | -501.00M | -615.00M | -157.00M | -790.00M | -855.00M |
Xylem Technical Analysis
Negative
121.75
Price Trends
131.08
Negative
136.16
Negative
136.83
Negative
Market Momentum
-3.11
Negative
36.57
Neutral
46.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XYL, the sentiment is Negative. The current price of 121.75 is below the 20-day moving average (MA) of 123.85, below the 50-day MA of 131.08, and below the 200-day MA of 136.83, indicating a bearish trend. The MACD of -3.11 indicates Negative momentum. The RSI at 36.57 is Neutral, neither overbought nor oversold. The STOCH value of 46.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $9.93B | 27.54 | 17.82% | 0.70% | 4.18% | 16.05% | |
78 Outperform | $16.67B | 28.23 | 16.15% | 0.79% | 8.01% | 2.67% | |
74 Outperform | $15.11B | 28.71 | 17.30% | 1.64% | 3.78% | 4.85% | |
68 Neutral | $29.60B | 34.64 | 8.59% | 1.15% | 5.56% | 13.76% | |
68 Neutral | $14.30B | 26.14 | 17.48% | 0.96% | 0.83% | -1.32% | |
66 Neutral | $9.75B | 26.05 | 15.81% | 1.17% | 3.19% | 69.89% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
XYL
Xylem
121.75
0.11
0.09%
FLS
Flowserve
76.59
26.00
51.39%
ITT
ITT
193.71
56.85
41.53%
NDSN
Nordson
270.85
67.15
32.96%
PNR
Pentair
87.61
-1.60
-1.80%
WTS
Watts Water Technologies
297.79
87.07
41.32%
Xylem Corporate Events
Business Operations and StrategyStock Buyback
Xylem Authorizes New $1.5 Billion Share Repurchase Program
Positive
Feb 25, 2026
On February 25, 2026, Xylem Inc.’s Board of Directors approved a new share repurchase program authorizing the company to buy back up to $1.5 billion of its common stock with a par value of $0.01. The authorization has no expiration date and ...
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.