CORRECTED-Xylem Q2 revenue misses estimates

Corrects to remove extraneous word "rises" from headline

Overview

• Water solutions provider's Q2 revenue up 2% yr/yr, missed analyst expectations

• Adjusted EPS for Q2 rose 16%, beating analyst expectations

• Company cites productivity savings and strong price realization for margin expansion

Outlook

• Xylem forecasts 2026 revenue of about $9.2 bln, up 2% on a reported basis

• Company raises 2026 adjusted EPS guidance to $5.55-$5.70 from $5.35-$5.60

• Xylem expects 2026 adjusted EBITDA margin of 23.1%-23.5%, up 90-130 basis points from 2025

Result Drivers

• PRODUCTIVITY AND PRICING - Margin expansion driven by productivity savings and strong price realization, per company

• INDUSTRIAL DEMAND - CEO said demand is increasing from industrial sectors including AI infrastructure, semiconductors, power generation, and life sciences

• LOWER RESTRUCTURING COSTS - Improved net income attributed in part to lower restructuring and realignment costs

Company press release: ID:nBw9hLpnma

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery equipment peer group is "buy"

• Wall Street's median 12-month price target for Xylem Inc is $154.00, about 28.2% above its July 27 closing price of $120.16

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 21 three months ago

Reuters Recommended Reads

• July 27 - H2O America Q2 adjusted EPS beats estimates

• July 27 - Applied Digital beats quarterly revenue estimates on surging AI infrastructure demand

• July 28 - Largest US power grid moves ahead with plan to meet swelling demand

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)