Xylem (NYSE:XYL) Shares Gap Down Following Weak Earnings

Xylem Inc. (NYSE:XYL)’s stock price gapped down prior to trading on Tuesday following a weaker than expected earnings announcement. The stock had previously closed at $108.24, but opened at $102.00. Xylem shares last traded at $97.9030, with a volume of 764,895 shares.

The industrial products company reported $1.44 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $1.45 by ($0.01). Xylem had a return on equity of 11.77% and a net margin of 11.15%. The company had revenue of $2.20 billion during the quarter, compared to analyst estimates of $2.28 billion. During the same period last year, the business earned $1.37 earnings per share. The firm’s revenue was down 3.0% compared to the same quarter last year.

Xylem Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, September 24th. Shareholders of record on Thursday, August 27th were given a $0.43 dividend. The ex-dividend date of this dividend was Thursday, August 27th. This represents a $1.72 dividend on an annualized basis and a yield of 1.7%. Xylem’s dividend payout ratio (DPR) is currently 40.95%.

Trending Headlines about Xylem

Here are the key news stories impacting Xylem this week:

• Positive Sentiment: Xylem reported adjusted earnings of $1.44 per share, up from $1.37 a year earlier, indicating year-over-year earnings growth despite the quarterly miss. Management characterized performance as resilient amid ongoing portfolio restructuring. Xylem Reports Solid Q3 Results Amid Portfolio Restructuring
• Neutral Sentiment: Investors had expected infrastructure demand, data-center-related growth and contributions from the TriOS acquisition to support results, while higher costs were expected to remain a headwind. These factors remain important to the outlook, but the reported revenue shortfall suggests the benefits have not fully offset other pressures. Xylem Q3 Earnings Preview
• Negative Sentiment: Third-quarter revenue was $2.20 billion, below the roughly $2.28 billion consensus estimate and down 3% from the prior-year period. EPS of $1.44 also missed estimates ranging from $1.45 to $1.47. The combination of declining sales and earnings below expectations is the primary reason the stock has weakened. Xylem Misses Q3 Earnings and Revenue Estimates
• Negative Sentiment: Analyst sentiment has also deteriorated: Stifel reduced its price target from $160 to $141, while the reported consensus target declined 10.52% to MX$2,553.80. Lower targets may reinforce concerns about near-term growth and valuation, particularly with XYL trading below its 200-day moving average. Stifel Cuts Xylem Price Target

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on XYL. Wolfe Research initiated coverage on shares of Xylem in a report on Tuesday, September 15th. They issued a “peer perform” rating for the company. Robert W. Baird upped their price objective on Xylem from $163.00 to $165.00 and gave the company an “outperform” rating in a research note on Wednesday, July 29th. Oppenheimer reaffirmed an “outperform” rating and set a $150.00 target price (down from $158.00) on shares of Xylem in a report on Wednesday, October 14th. JPMorgan Chase & Co. lowered their target price on Xylem from $137.00 to $118.00 and set a “neutral” rating on the stock in a research note on Monday, October 19th. Finally, UBS Group lowered their price target on Xylem from $138.00 to $112.00 and set a “neutral” rating on the stock in a research report on Monday, October 5th. Eight equities research analysts have rated the stock with a Buy rating and eight have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $140.85.

Institutional Investors Weigh In On Xylem

A number of large investors have recently bought and sold shares of the company. Dunhill Financial LLC bought a new stake in shares of Xylem during the 2nd quarter worth $30,000. Avalon Trust Co acquired a new position in shares of Xylem in the second quarter valued at approximately $35,000. Orion Capital Management LLC bought a new position in Xylem in the 2nd quarter valued at approximately $35,000. Aventus Investment Advisors Inc. raised its holdings in Xylem by 66.7% in the 2nd quarter. Aventus Investment Advisors Inc. now owns 300 shares of the industrial products company’s stock valued at $35,000 after buying an additional 120 shares during the last quarter. Finally, Global Assets Advisory LLC acquired a new stake in Xylem during the 1st quarter worth approximately $40,000. 87.96% of the stock is currently owned by institutional investors and hedge funds.

Xylem Trading Down 9.2%

The company has a current ratio of 1.61, a quick ratio of 1.24 and a debt-to-equity ratio of 0.23. The firm has a market capitalization of $22.96 billion, a price-to-earnings ratio of 23.44, a P/E/G ratio of 1.75 and a beta of 1.00. The firm’s 50-day moving average is $106.98 and its 200 day moving average is $118.54.

About Xylem

Xylem Inc (NYSE: XYL) is a global water technology company that develops products and services for the transportation, treatment, testing and efficient use of water and wastewater. Its offerings support municipal water and wastewater utilities, industrial customers, commercial facilities and residential applications.

The company’s products and solutions include water and wastewater pumps, treatment systems, dewatering equipment, smart meters, monitoring and control technologies, leak detection tools, and data-driven analytics.