Investors in Xylem Inc. (NYSE:XYL) had a good week, as its shares rose 5.2% to close at US$122 following the release of its quarterly results. Results were roughly in line with estimates, with revenues of US$2.3b and statutory earnings per share of US$1.11. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following last week's earnings report, Xylem's 21 analysts are forecasting 2026 revenues to be US$9.21b, approximately in line with the last 12 months. Per-share earnings are expected to increase 4.6% to US$4.56. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.25b and earnings per share (EPS) of US$4.58 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$153, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Xylem analyst has a price target of US$183 per share, while the most pessimistic values it at US$129. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xylem's past performance and to peers in the same industry. We would highlight that Xylem's revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2026 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Xylem.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Xylem's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$153, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Xylem going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Xylem's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.