Xylem Inc. (NYSE:XYL) stock gained about 5% yesterday following the release of better-than-expected third-quarter results. XYL’s quarterly performance benefitted from a 3% organic growth in orders and a 5% rise in backlog.
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The global water technology company specializes in solutions for water and wastewater transport, treatment, and management.
XYL’s Q3 Snapshot
Xylem Q3 adjusted EPS of $0.99 increased by 14% year-over-year, surpassing the consensus estimate of $0.89. Meanwhile, the company posted revenues of $2.1 billion in the quarter, up 50% year-over-year, and came above Wall Street’s expectations of $1.99 billion. Revenue climbed 10% on an organic basis.
Looking ahead, XYL has raised full-year 2023 revenue growth expectations on the back of impressive year-to-date results and favorable business trends. It now expects the top line to rise by 32% on a reported basis and 11% organically, in comparison to 30% on a reported basis and 9% to 10% on an organic basis.
Analyst’s Take
Following the release, Oppenheimer analyst Bryan Blair reiterated his bullish stance on the stock with a Buy rating. The analyst’s price target of $118 implies a 26.2% upside potential from the current level.
Blair maintains a positive outlook regarding the business potential of the merged Xylem and AQUA operations. This is based on Xylem’s enhanced portfolio, significant ESG impact, and the opportunity for future earnings growth.
Is Xylem a Good Stock to Buy?
On TipRanks, Xylem stock has a Moderate Buy consensus rating based on six Buys and three Holds. The average stock price target of $123.38 implies a 31.9% upside potential. The stock is down nearly 15% so far in 2023.
