Oppenheimer Cuts Price Target on Xylem (XYL) to $56; Reiterates Outperform

Oppenheimer maintained an Outperform rating on Xylem (NYSE: XYL), and cut the price target to $56.00 (from $58.00). Oppenheimer cut 2017 EPS estimates to $2.25 (from $2.35) and 2018 estimates to $2.65 (from $2.70).

Analyst Jim Giannakouros commented, "XYL remains a favored name in our coverage in 2017. We remain encouraged by the company's intermediate- to long-term outlook given: 1) water infrastructure spending acceleration, 2) margin expansion runway; and 3) Sensus synergy upside. However, we adjust our estimates for incremental non-operating FX headwinds and some conservatism on near-term organic trends (industrials likely flattish, with tough comps in US muni through 1H17). We believe both the scarcity premium attributable to water assets as well as its reliable/visible growth are sustainable contributors to XYL's current valuation, and believe it remains a stock to own in an otherwise organically challenged general industrial universe. We adjust our PT to $56 (from $58) on a slightly more conservative '18E EPS ($2.65), or 15% upside from current levels."

For an analyst ratings summary and ratings history on Xylem click here. For more ratings news on Xylem click here.

Shares of Xylem closed at $49.37 yesterday.

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