North America Environmental Services: Summarizing investor feedback on Water Tech initiations & WTS U/G

Research evidence excerpt

North America Environmental Services: Summarizing investor feedback on Water Tech initiations & WTS U/G

Equity Research

North America Environmental Services

8 July 2026

Summarizing investor feedback on

Water Tech initiations & WTS U/G

Pushback centered on two questions: are premium North America Environmental Services

valuations justified, and has a potential municipal slowdown POSITIVE

already been priced in? We review feedback and key debates North America Environmental Services

William Grippin, CFA

from our latest convos on ZWS, MWA, HWKN, and WTS. +1 617 330 5804

william.grippin@barclays.com

BCI, US

We summarize feedback following a week of investor conversations on our recent notes

expanding our Water Tech coverage and upgrade of WTS. The most common investor pushback Alec Scheibelhoffer

focused on 1) relative valuation with our OW calls (ZWS/WTS) generally perceived as expensive +1 212 526 1021

alec.scheibelhoffer@barclays.comvs. peers and 2) investors questioning whether our more negative view on utility-exposed

names has already played out. For our full notes, please see the following:

•• Expanding coverage in Water Tech; Initiate ZWS at OW, MWA at UW, HWKN at EW

•• WTS: Upgrade to OW on data center growth opportunity

Coverage expansion

At a high level, our relative preference for commercial/industrial over municipal-exposed names

resonated with most investors we spoke to. Investors generally agreed with our view that water

utility budgets are likely to be tighter post-2026. However, some questioned if this thesis has

already played out given the significant de-rating of Water Tech peers YTD such as BMI, VLTO,

XYL.

•• ZWS: Feedback focused on sustainability of the stock's above-peer multiple and the rationale