Analyst Ratings January 26, 2026

William Blair Starts Coverage of Xylem With Outperform Call

Analyst cites mission-critical solutions, extensive installed base and strong recent results as drivers behind the upbeat initiation

By Avery Klein XYL
William Blair Starts Coverage of Xylem With Outperform Call
XYL

William Blair initiated coverage of Xylem Inc. (NYSE: XYL) with an Outperform rating, highlighting the company’s position as a leading pure-play water technology provider. The research note emphasized Xylem’s broad portfolio across the water cycle, its sizeable installed base supported by thousands of service professionals, and mission-critical solutions for utility and industrial customers. Recent financial results and a positive credit outlook from S&P Global Ratings were also noted.

Key Points

  • William Blair initiated coverage of Xylem with an Outperform rating, noting the company’s status as the world’s largest pure-play water company and its broad portfolio across the water and wastewater cycle.
  • Xylem reported $8.89 billion in trailing twelve-month revenue and holds a InvestingPro financial health score of 2.87, labeled as GOOD; shares have risen 17.56% over the past year.
  • Recent quarterly results beat expectations and S&P Global Ratings revised Xylem’s outlook to positive while affirming a 'BBB' rating; the Board declared a $0.40 quarterly dividend payable December 23, 2025.

William Blair opened coverage of Xylem Inc. with an Outperform rating, according to the firm’s report released on Monday. The water-technology specialist is valued at $34.39 billion and, based on InvestingPro data, its shares have gained 17.56% over the trailing 12 months.

The research house described Xylem as "the world’s largest pure-play water company," pointing to a comprehensive product and service portfolio that touches nearly every phase of the water and wastewater lifecycle. Over the last twelve months, Xylem recorded $8.89 billion in revenue and holds a financial health score of 2.87 on InvestingPro, a score labeled as "GOOD."

William Blair analyst Brian Drab underscored the critical nature of Xylem’s offerings, saying the company’s solutions are "often mission critical" to its utility and industrial customer base. The firm highlighted Xylem’s edge in having trusted brands throughout a large global installed base, supported by thousands of service professionals who help maintain and service deployed equipment.

Xylem’s business covers equipment and services that address the full cycle of water - from collection and distribution through use and the eventual return of water to the environment. That end-to-end scope was central to William Blair’s positive view.


Recent company-reported results and credit developments were also cited in the coverage note. For the third quarter of 2025, Xylem reported earnings per share of $1.37, ahead of the $1.23 consensus forecast. Revenue for the quarter came in at $2.3 billion, exceeding the projected $2.22 billion.

S&P Global Ratings revised its outlook on Xylem to positive from stable while affirming a 'BBB' credit rating. S&P noted Xylem’s strong credit metrics and reported adjusted leverage of 0.9 times as of September 30, 2025. In a shareholder-facing move, Xylem’s Board declared a quarterly dividend of $0.40 per share, payable on December 23, 2025, to shareholders of record as of November 25, 2025.

Taken together, the initiation by William Blair, the company’s recent quarter that beat expectations, and the improved outlook from S&P reflect favorable momentum in both operating and credit performance, as presented in the firm’s coverage note.

Risks

  • Xylem’s business is concentrated on utility and industrial customers for mission-critical water and wastewater solutions, exposing the company to demand fluctuations in those sectors.
  • Market valuation and share-price movement have varied, as reflected by a 17.56% share-price increase over the past year, indicating potential volatility in investor sentiment.
  • Credit assessments remain a factor for the company’s financing profile despite the recent positive outlook from S&P; ratings and leverage metrics will continue to be monitored by investors and agencies.

More from Analyst Ratings

Freedom Capital Markets Starts Coverage of Nebius Group With Buy Rating, $108 Target Feb 2, 2026 Goldman Keeps OLN Neutral at $22 as Olin Signals Rough Q1, Cost Cuts to Cushion Results Feb 2, 2026 Aletheia Capital Starts Coverage on Teradyne With Buy Rating, $400 Target Feb 2, 2026 Needham Lifts Napco Security Price Target to $49 After Robust Q2 Results Feb 2, 2026 Evercore ISI Sticks with Outperform on Apple, Sets $330 Target Backed by App Store and Services Strength Feb 2, 2026