Jefferies Upgrades Xylem (XYL) to Buy with $140 Price Target

Key Facts

1Jefferies upgraded Xylem Inc. (XYL) to Buy and raised its price target to $140.

2Analysts believe the stock is undervalued compared to industrial peers benefiting from data center exposure.

3The company recently expanded its partnership with Dow to design and operate advanced water systems in Canada.

As digital infrastructure expansion accelerates, water management solutions are emerging as a critical component for data center sustainability. Jefferies has upgraded Xylem Inc. (XYL) to a 'Buy' rating with a price target of $140, as analysts believe the stock is undervalued relative to its industrial peers. The report also highlighted the company's recent expansion of its partnership with Dow to design and operate advanced water systems in Canada as a key growth driver.

This upgrade comes amid robust demand for water technology, with Xylem reporting 7% organic revenue growth in its most recent fiscal quarter according to historical earnings data. Compared to peers, Xylem trades at attractive multiples relative to Pentair (PNR), which has also seen strong inflows driven by liquid cooling demands in data centers, per market data. Experts note that the company's recurring revenue streams enhance its financial resilience against cyclical economic shifts.

Shares of XYL closed at $117.27 (close July 01, 2026), suggesting significant upside potential toward the new target. Traders are monitoring support levels near the recent low of $117.22. On the economic front, investors should watch the Chinese Manufacturing PMI scheduled for June 30, as it may influence global industrial sentiment and supply chain outlooks.