Seaport Global Securities Starts Xylem (XYL) at Neutral, 'Earnings Growth More Visible Than in the Past'

Seaport Global Securities analyst Scott Graham initiates coverage on Xylem (NYSE: XYL) with a Neutral rating.

The analyst comments "We are initiating coverage of Xylem (XYL) with a Neutral rating. XYL is a pure play water equipment and services company. Sales growth has historically been stable due to XYL's effective growth strategies and the daily importance of wastewater treatment and drinking water metering in the Utility, Industrial and Commercial markets. Its markets also have secular tailwinds. Earnings growth has, however, historically only been mid-single digit and barely above organic. Yet we believe this paradigm is changing. Prior pressures in the M&CS segment and with price-cost have reversed. Productivity remains superlative. Additionally, new sales growth paths are being cultivated. The recent Evoqua acquisition should be accretive to EPS in 2024. We see earnings growth accelerating to double-digit in 2H24 and 2025 and being more durable. Our Neutral rating is based on intermediate term concerns over growth and the stock's valuation."

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 $101.82 yesterday.

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