Wedbush upgraded Xylem (NYSE: XYL) from Neutral to Outperform with a price target of $42.00 (from $38.00). Analyst David L. Rose thinks Q1 results suggest its turnaround has legs.

"Recent results reflect continued progress on the early stages of an operational turn-around. While end markets are still challenged, fundamentals appear to be improving and given the nearly 10% pullback from its highs, we believe this is an attractive entry point for long-term investors looking to own one of the higher quality water franchises. In our opinion, XYL’s broad portfolio of water solutions, strong balance sheet, and improving operations should help the shares OUTPERFORM their peer group," said Rose.

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 $36.44 yesterday.