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Headquartered in Washington, DC, Xylem, Inc. (XYL) is a global leader in water solutions, engaged in the entire water cycle from collection to distribution and environmental return. With a market cap of $33.1 billion, it operates through three segments: Water Infrastructure, Measurement & Control Solutions, and Applied Water.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Xylem fits this criterion perfectly, signifying its measurable size, stability, and influence in the water services industry. Xylem's innovative product portfolio, focusing on smart water technology and energy efficiency, positions it as a leader in sustainable water management solutions.
The leading water solution company’s stock is currently trading 6.6% below its 52-week high of $146.08, which it touched on May 21. XYL stock has gained 5.4% over the past three months, outperforming the Invesco S&P Global Water Index ETF’s (CGW) marginal decline during the same period.
In the long term, shares of Xylem have rallied 19.3% on a YTD basis, overshadowing the CGW’s 4.9% returns in the same time frame. Over the past 52 weeks, XYL stock has surged 22.2%, surpassing the CGW’s 8.8% gains.
Since mid-November, XYL has traded above both its 100-day and 200-day moving averages, suggesting a bullish price trend.
Xylem's outperformance can be attributed to robust operational performance and healthy demand across most segments and regions, leading to record Q1 margins. The company is on track to capture synergies from its integration with Evoqua and is also driving simplification across its business to sustain and enhance margin improvements over time.
On May 3, the company’s stock jumped 3.8% following its Q1 earnings release. It reported adjusted EPS of $0.90, surpassing Wall Street’s expectations by 7.1%. The company posted revenue of $2.03 billion, slightly exceeding forecasts. Xylem also raised its fiscal 2024 guidance range, now expecting earnings between $4.10 and $4.25 per share, while revenue is projected to be approximately $8.5 billion.
Meanwhile, its competitor, A. O. Smith Corporation (AOS), has significantly underperformed XYL. AOS stock has gained 13.5% over the past 52 weeks but has dropped marginally in 2024, trailing XYL’s return over the respective periods.
Further, analysts are moderately optimistic about the stock's prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it, and the mean price target of $149.43 reflects a premium of 9.6% from the current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
