Xylem's Price Target Lowered At Credit Suisse, RBC Capital, Rosenblatt After Investor Day

  • Credit Suisse analyst John Walsh lowered Xylem Inc's XYL price target from $110 to $105, implying a downside of 13%, and maintained an Underperform rating.
  • RBC Capital analyst Deane Dray lowered the price target to $136 (implying an upside of 12%) from $140 and maintained an Outperform rating on the shares. 
  • Dray attributes the price target change to the company's analyst day announcement that supply chain headwinds have pushed about $100M of sales into 2022, but this is "unsurprising" given the worsening inflation and supply chain disruptions impacting all manufacturers today.
  • He further notes that the presentation focused on Xylem's plan to grow high-margin digital sales from the current 35% of revenues to over 50% by 2025, representing a "compelling dimension" of the company's "highly differentiated" growth strategy.
  • Related ContentXylem Reaffirms Growth Strategy; Foresees ~$100M Adverse Revenue Impacts In 2H
  • Rosenblatt analyst Scott Graham downgraded Xylem to Hold from Buy and lowered the price target to $120 (implying a downside of 1%), from $140.
  • Graham noted that management said the supply situation has worsened in recent weeks. He has cut his estimates and was also "somewhat disappointed" in Xylem's 2021-2025 margin expansion targets.
  • Price Action: XYL shares are trading lower by 1.98% at $121.23 on the last check Friday.
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