Xylem (XYL) Received its Third Buy in a Row

After Cowen & Co. and Raymond James gave Xylem (NYSE: XYL) a Buy rating last month, the company received another Buy, this time from Oppenheimer. Analyst Bryan Blair maintained a Buy rating on Xylem yesterday and set a price target of $80. The company’s shares closed on Friday at $70.15.

Blair said:

“XYL reported 4Q18 adj. EPS of $0.88, in line with our/consensus estimate as strong WI performance and favorable below-the-line items offset worse than anticipated MCS margin pressures. Importantly, organic orders increased 10% y/y (marking the fifth consecutive quarter of +HSD/LDD growth), evidencing solid underlying demand/continued share gains and supporting guided +4-6% 2019 core sales growth. Although near-term MCS margin compression (continued inflation and investment headwinds through 1H19) slightly tempers our 2019 earnings outlook, we remain encouraged by XYL’s robust core growth, traction on strategic priorities (legacy segment growth and margin trajectory supportive of 2020 targets), and resultant mid- teens core EPS CAGR. Adding strategic M&A capacity (rebuilding into 2019), we believe XYL remains positioned for intermediate-term EPS outgrowth.”

According to TipRanks.com, Blair is a 1-star analyst with an average return of -2.9% and a 44.4% success rate. Blair covers the Industrial Goods sector, focusing on stocks such as Carlisle Companies Incorporated, Watts Water Technologies, and Mueller Water Products.

Currently, the analyst consensus on Xylem is a Strong Buy with an average price target of $80.29, which is a 14.5% upside from current levels. In a report issued on January 31, Boenning & Scattergood also reiterated a Buy rating on the stock with a $82 price target.

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The company has a one-year high of $82.44 and a one-year low of $60.65. Currently, Xylem has an average volume of 1.04M.

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Xylem, Inc. engages in the design, manufacture and application of highly engineered technologies for the water industry. It provides water and wastewater applications with a broad portfolio of products and services addressing the full cycle of water, from collection, distribution and use to the return of water to the environment.

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