Oppenheimer analysts provided a review on Xylem Inc. (NYSE:XYL) following the investor meetings with CFO Sandy Rowland and VP of IR Andrea van der Berg.
The analysts come away incrementally constructive on the company’s medium-term prospects, highlighting management’s commentary on underlying demand, with near-term revenue upside only limited by China lockdowns (approximately $40—50 million H1 impact) and well-documented chip shortages.
Adding strong price traction (particularly AWS), the analysts view the company’s 2022 guidance framework as reasonable barring a significant shift in macro backdrop. Perhaps more importantly, management sounded confident in accelerating M&CS backlog conversion as chip supply improves and stressed the team’s focus on strategic capital deployment/compound earnings growth.