Xylem Inc. Faces Stock Decline Despite Growth in Water Technology
Xylem Inc. (XYL), based in Washington, D.C., is recognized globally as a leader in water technology, effectively tackling significant water-related challenges. This large-cap company, boasting a market cap of $29.3 billion, offers innovative technologies and services focused on water management, treatment, and transportation. Their mission not only supports communities and industries but also promotes environmental sustainability.
Recent Stock Performance
The company’s shares have decreased by 17.4% from their 52-week high of $146.08, reached on May 21. In the past three months, XYL has seen a decline of 7.8%, significantly trailing the broader Nasdaq Composite’s ($NASX) 12.7% gain.
Year-To-Date and 52-Week Trends
Long-term investors will note XYL’s year-to-date gain of 5.5% and a 52-week return of 10.5%. To compare, the NASX has risen 32.7% in 2024 and 35.2% over the past year. XYL’s stock has been trading below its 200-day and 50-day moving averages since late October, indicating a bearish trend.
Mixed Q3 Results Affect Stock Price
On October 31, Xylem reported mixed third-quarter results that impacted its stock, causing shares to drop by 6.5%. The company recorded revenues of $2.1 billion, which rose 1.3% year-over-year but fell short of Wall Street’s expectations by 3.2%. While adjusted earnings per share (EPS) of $1.11 matched forecasts, EBITDA came in slightly below estimates at $447 million.
Despite maintaining a consistent gross margin of 37.3%, Xylem’s operating margin improved notably to 13.3%, up from 9.2% the previous year, indicating enhanced operational efficiency.
Updated Financial Guidance
Xylem has adjusted its full-year revenue guidance to $8.5 billion, representing a modest 0.6% decrease. However, it has kept its adjusted EPS guidance steady at $4.23.
Competitive Landscape and Analyst Outlook
In comparison, Parker Hannifin Corporation (PH) has outperformed Xylem over the last year, with shares gaining 45.8% in 2024 and returning 10.6% over the last 52 weeks. Wall Street analysts maintain a cautiously optimistic outlook for XYL, with 18 analysts offering a consensus rating of “Moderate Buy.” A mean price target of $152.07 suggests a potential upside of 26.1% from its current price.
On the date of publication,
Rashmi Kumari
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
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
