Street Calls of the Week
WASHINGTON - Global water solutions company Xylem Inc. (NYSE:XYL), currently valued at $36 billion and maintaining a "GREAT" financial health score according to InvestingPro, announced it has entered into a definitive agreement to sell its international water and heat metering business to investment group AURELIUS, according to a press release statement.
The transaction includes Xylem’s metering assets, products, and facilities serving customers in Europe and select international markets. The division, which is part of Xylem’s Measurement and Control Solutions segment, generated approximately $250 million in revenues in 2024 with Adjusted EBITDA margin that was dilutive to Xylem’s overall margins. The company’s strong balance sheet, with a healthy current ratio of 1.9 and moderate debt levels, positions it well for this strategic move.
Xylem will retain its North American smart metering business, which the company considers strategically important for driving above-market growth. InvestingPro analysis reveals the company has maintained dividend payments for 15 consecutive years, demonstrating consistent shareholder returns alongside its strategic initiatives.
"This decision reflects our strategy to simplify our portfolio and focus on where we can have the greatest impact empowering customers and communities to build a more water-secure world," said Matthew Pine, Xylem president and CEO.
Following the transaction, Xylem’s smart metering portfolio will continue to be marketed under the Sensus name in North America. Employees associated with the international division will become part of a standalone Sensus International group owned by AURELIUS.
The deal is expected to close in the first quarter of 2026, subject to regulatory approvals and customary closing conditions. Financial terms were not disclosed.
Xylem, a Fortune 500 company with 23,000 employees, reported revenue of $8.6 billion in 2024. The company will release its third-quarter 2025 results on October 28, 2025. Trading near its 52-week high, Xylem’s stock currently appears slightly overvalued according to InvestingPro’s Fair Value analysis, with 12 additional exclusive insights available for subscribers.
In other recent news, Xylem Inc. reported robust financial results for the second quarter of 2025, with earnings per share reaching $1.26, surpassing analyst expectations by $0.11. The company’s revenue also exceeded forecasts, coming in at $2.3 billion compared to the anticipated $2.21 billion. These results highlight Xylem’s strong financial performance and operational efficiency. In addition to the earnings report, Mizuho raised its price target for Xylem to $140, citing the company’s restructuring efforts and progress on its 80/20 initiatives. Meanwhile, TD Cowen also increased its price target to $130, maintaining a Hold rating, and noted Xylem’s strong market positioning despite potential challenges in order comparisons later in the year. These developments reflect a positive outlook from analysts regarding Xylem’s strategic initiatives and market presence.
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