Shares of the premium industrial products company Xylem Inc. XYL hit a fresh 52-week high of $51.85 per share on Sep 21, 2016. However, the stock closed the trading session slightly lower at $51.81. It gained roughly 58.8% over the last one year. The company is currently trading at a forward P/E (price/earnings) of 24.89x and has a long-term earnings growth expectation of 11.33%.
The Zacks Rank #3 (Hold) stock holds enough credentials to secure investors’ confidence but feeble energy market conditions hoists our worry.
Bullish & Bearish Factors to Play
Increasing demand for wastewater and water infrastructure services is likely to boost Xylem’s sales in the quarters ahead. Also, the Tideland Signal Corporation (Feb, 2016) and Sensus (inked in Aug, 2016) acquisitions are expected to improve the company’s top and bottom line in the quarters ahead.
However, uncertain energy market conditions might limit near-term growth of the stock. Sales and investments made within the energy sector are currently weakening due to the volatile prices of energy resources. This, in turn, is depressing the revenues generated by industrial product companies of the U.S. like Xylem.
Henceforth, Xylem is encircled by both bullish and bearish aspects at present. Over the last 60 days, Zacks Consensus Estimate for the Zacks Rank #3 (Hold) stock has moved south only by 0.5% for 2016, however, has not changed for 2017.
Stocks to Consider
Some better-ranked stocks within the industry include DXP Enterprises, Inc. DXPE, Nordson Corp. NDSN and Tennant Company TNC. All the companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment