XYL Should I Buy
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Xylem Inc. (XYL) is not a strong buy at the moment for a beginner investor with a long-term focus. While the company has demonstrated solid financial performance and growth in Q4 2025, the stock is currently facing headwinds such as weaker-than-expected guidance for 2026, bearish technical indicators, and mixed analyst sentiment. Given the lack of strong positive catalysts and the absence of Intellectia Proprietary Trading Signals, it is better to hold off on purchasing this stock for now.
The MACD is below zero and negatively contracting, indicating bearish momentum. RSI is neutral at 31.672, and moving averages are converging, showing no strong trend. The stock is trading near support levels (S1: 126.731), with resistance at 133.985. Overall, the technical indicators suggest a cautious approach.
Xylem reported strong Q4 earnings with record revenue of $2.397 billion and EPS of $1.42, exceeding expectations. The company also increased its dividend to $0.43 per share, reflecting improved cash flow and profitability.
The company's 2026 revenue guidance fell short of expectations, leading to a negative market reaction. Analysts have lowered price targets, citing concerns about project delays, weakness in China, and funding risks. Technical indicators and options sentiment also point to bearish momentum.
In Q4 2025, Xylem's revenue increased by 6.25% YoY to $2.397 billion, net income grew by 2.76% YoY to $335 million, and EPS rose by 2.24% YoY to $1.37. Gross margin improved to 38.88%, up 2.34% YoY. Despite solid growth, forward guidance has tempered expectations.
Analysts have mixed views on Xylem. While many maintain Buy or Outperform ratings, several firms have lowered price targets due to weaker-than-expected guidance and macroeconomic risks. Price targets now range from $135 to $175, with a median target of approximately $160.
