The analyst's rating upgrade reflects his confidence in Xylem's structurally improved portfolio, continued beat & raise prospects, and medium-term growth prospects.

The analyst projects steady top-line and cash flow growth going forward, given Xylem's backlog of ~$5.3 billion, resilient core WI demand, and benefit from a notably long tail for AMI adoption.

The analyst revised EPS to $3.67 (from $3.70) in FY23 and $4.12 (from $4.20) for FY24. He introduced FY25 EPS of $4.65 with expected revenue synergies (and related incremental drop-through), driving solid upside vs. 2024-25 projections.

Price Action: XYL shares are trading higher by 2.16% at $92.29 on the last check Thursday.