Xylem Sinks 12% to 3-Year Low on Q3 Miss, Guidance Cut and Divestiture Plan
XYL is trading near its 52-week low of $94.755 (1.0% above the low) on elevated volume (2.4× avg).
Summary
Xylem fell as much as 12% Tuesday to a three-year low after Q3 revenue of $2.2 billion missed consensus by $80 million and adjusted EPS of $1.44 came in a penny light. Management cut 2026 revenue guidance to about $8.95 billion, implying a 1% decline versus the prior call for 2% growth, and trimmed adjusted EPS to $5.40-$5.45 from $5.55-$5.70. The problem is timing, not demand: orders rose 7% to $2.3 billion with 10% organic growth, but CEO Matthew Pine said utility customers are more cautious about the economy and are deferring metering replacements, with some major projects not deploying until the second half of 2027 and into 2028. Alongside the print, Xylem announced plans to divest Applied Water International and Specialty Flow Control — about 9% of revenue but under 5% of EBITDA — and will collapse four segments into three starting January 1, 2027. Margins are the one bright spot, with adjusted EBITDA margin up 70 basis points to 23.9%, but free cash flow margin guidance was cut to the bottom of the range at roughly 10.2%.
At the time of this announcement, XYL was trading at $95.72 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $22.3B. The 52-week trading range was $94.76 to $154.27. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Seeking Alpha.