Margins come in better, driving 2Q beat

研报英文原文证据摘录

Margins come in better, driving 2Q beat

Forecast returns

Forecast price appreciation 7.4%

Forecast dividend yield 1.5%

Forecast stock return 8.9%

Market return assumption 9.3%

Forecast excess return -0.5%

Company Description

Xylem is a leading water technology company that manufactures highly engineered products

and services, with applications ranging from water delivery, treatment, and measurement to

wastewater/stormwater management. Its customer base includes water and wastewater

utilities, farms, mines, power plants, and industrial facilities. The company generated ~

$7.4bn in sales in 2023.

Valuation Method and Risk Statement

Valuation: We use a relative P/E methodology to value XYL.

Risk Statement: The Electrical Equipment and Multi Industry sector faces a broad range of

risks. It is cyclical in nature with exposure to the underlying cycles inherent in everything from

aviation, auto, trucking and trains to construction and consumer electronics to mining,

power, oil and gas and more depending on the specific stock. EEMI companies are subject to

risks associated with unexpected changes in the underlying global macro environment,

currency and interest rate movements, commodity price inflation as well as company-specific

execution, M&A, integration, labor relations and changes in the competitive or regulatory

environment. These changes can be in the form of product technology, e-commerce and

other digital disruption and/or channel disintermediation. Capacity and related pricing

pressures are also a risk through the cycle. Finally, these multinational companies are subject

to policy changes taking place in the United States and internationally, including those related

to environmental regulation and tariffs. Specifically to XYL, primary risks include slowing