The future is bright for water technology company Xylem , according to JPMorgan. Analyst Mark Strouse initiated coverage of Xylem with an overweight rating and price target of $148 per share. That suggests 17.8% upside for the company, which provides a wide swathe of water solutions, such as drinking water treatment and measurement, pump installation and wastewater management systems. Shares of Xylem have added 8.3% year to date. Strouse believes the stock is a strong play for investors wanting to invest directly into water technology. “XYL is an industry leading water technology pure play and we believe an attractive core long-term holding for industrial and sustainability focused investors seeking exposure to resilient and diversified water end markets, many of which carry multi-decade secular tailwinds,” Strouse said in a Friday note to clients. “With XYL currently trading at a discount to historical averages, we view current levels as an attractive entry point.” XYL 1Y mountain Xylem stock performance. Xylem — which Strouse touted as a “winner in the world of water” — owns dozens of global brands that cater to different end markets. These include Evoqua, Flygt and Sensus. Evoqua is one of the Xylem’s leading brands, according to Strouse. The company, which represents Zylem’s water solutions and services segment, has “significant opportunities for global expansion” ahead given its relationships with Fortune 500 companies and Xylem’s service footprint abroad. Sensus, which Xylem acquired in 2016 for about $1.7 billion, is one of the largest players in the water metering business, he also pointed out. Strouse also sees upside from the a strategy implemented in 2023 to boost margin growth through fiscal 2027. “We believe the 80/20 simplification efforts under way, the large and multi-year PFAS opportunity, and the company’s continued integration of Evoqua, provide plenty of opportunity for the company to beat medium- to longer-term investor expectations,” he said.
