Stock Traders Purchase High Volume of Xylem Call Options (NYSE:XYL)

Key Points

• Unusual options activity hit Xylem, with traders buying 2,814 call options on Tuesday, about 150% above the stock’s usual daily call volume.
• Shares of Xylem fell slightly to $111.41, even after the company reported quarterly EPS of $1.12, topping estimates, and revenue of $2.12 billion, also above expectations.
• Xylem continues to return capital to shareholders through a $0.43 quarterly dividend and a $1.5 billion share repurchase authorization, while analysts currently view the stock as a Moderate Buy with an average target of $152.77.

Xylem Inc. (NYSE:XYL - Get Free Report) saw some unusual options trading on Tuesday. Traders acquired 2,814 call options on the company. This represents an increase of 150% compared to the typical daily volume of 1,124 call options.

Xylem Price Performance

Shares of NYSE:XYL traded down $0.36 on Tuesday, reaching $111.41. 313,565 shares of the company were exchanged, compared to its average volume of 2,010,494. The company has a 50-day moving average of $114.17 and a 200-day moving average of $126.01. The company has a current ratio of 1.46, a quick ratio of 1.10 and a debt-to-equity ratio of 0.13. The firm has a market cap of $26.48 billion, a price-to-earnings ratio of 27.68, a price-to-earnings-growth ratio of 1.59 and a beta of 1.05. Xylem has a 1-year low of $105.29 and a 1-year high of $154.27.

Xylem (NYSE:XYL - Get Free Report) last announced its quarterly earnings data on Tuesday, April 28th. The industrial products company reported $1.12 EPS for the quarter, beating the consensus estimate of $1.09 by $0.03. Xylem had a net margin of 10.79% and a return on equity of 11.26%. The firm had revenue of $2.12 billion during the quarter, compared to analysts' expectations of $2.11 billion. During the same quarter last year, the business earned $1.03 earnings per share. The business's revenue for the quarter was up 2.7% compared to the same quarter last year. Xylem has set its FY 2026 guidance at 5.350-5.600 EPS. Equities analysts forecast that Xylem will post 5.51 earnings per share for the current fiscal year.

Xylem Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, June 25th. Investors of record on Thursday, May 28th will be issued a $0.43 dividend. The ex-dividend date is Thursday, May 28th. This represents a $1.72 dividend on an annualized basis and a dividend yield of 1.5%. Xylem's dividend payout ratio is currently 42.79%.

Xylem declared that its board has authorized a stock repurchase plan on Wednesday, February 25th that permits the company to repurchase $1.50 billion in shares. This repurchase authorization permits the industrial products company to purchase up to 4.8% of its shares through open market purchases. Shares repurchase plans are often a sign that the company's board of directors believes its stock is undervalued.

Analysts Set New Price Targets

XYL has been the subject of several analyst reports. Jefferies Financial Group restated a "hold" rating and set a $130.00 price target (down from $140.00) on shares of Xylem in a research note on Tuesday, March 31st. Citigroup dropped their price objective on shares of Xylem from $174.00 to $168.00 and set a "buy" rating on the stock in a research note on Wednesday, April 29th. Weiss Ratings cut shares of Xylem from a "hold (c+)" rating to a "hold (c)" rating in a research note on Friday, May 8th. TD Cowen reaffirmed a "hold" rating on shares of Xylem in a report on Monday, February 23rd. Finally, UBS Group increased their price target on shares of Xylem from $132.00 to $133.00 and gave the stock a "neutral" rating in a report on Wednesday, April 29th. Seven investment analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. Based on data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average target price of $152.77.

Insider Transactions at Xylem

In other Xylem news, Director Jerome A. Peribere acquired 1,210 shares of the company's stock in a transaction dated Monday, May 4th. The shares were acquired at an average price of $116.61 per share, for a total transaction of $141,098.10. Following the acquisition, the director owned 27,209 shares in the company, valued at $3,172,841.49. The trade was a 4.65% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CAO Geri-Michelle Mcshane sold 4,269 shares of Xylem stock in a transaction on Thursday, May 7th. The stock was sold at an average price of $117.46, for a total transaction of $501,436.74. Following the sale, the chief accounting officer owned 3,605 shares in the company, valued at $423,443.30. This represents a 54.22% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.32% of the stock is owned by insiders.

Institutional Trading of Xylem

Large investors have recently bought and sold shares of the company. J. Stern & Co. LLP boosted its position in shares of Xylem by 12,326.6% in the 4th quarter. J. Stern & Co. LLP now owns 45,448,168 shares of the industrial products company's stock worth $6,189,132,000 after buying an additional 45,082,435 shares in the last quarter. Vanguard Group Inc. raised its position in Xylem by 0.5% during the fourth quarter. Vanguard Group Inc. now owns 30,054,743 shares of the industrial products company's stock worth $4,092,855,000 after acquiring an additional 152,507 shares during the last quarter. State Street Corp lifted its holdings in shares of Xylem by 2.6% in the fourth quarter. State Street Corp now owns 11,233,427 shares of the industrial products company's stock valued at $1,529,768,000 after purchasing an additional 280,221 shares in the last quarter. Geode Capital Management LLC grew its position in shares of Xylem by 2.4% in the fourth quarter. Geode Capital Management LLC now owns 6,357,278 shares of the industrial products company's stock valued at $862,364,000 after purchasing an additional 151,754 shares during the last quarter. Finally, Swedbank AB grew its position in shares of Xylem by 0.3% in the first quarter. Swedbank AB now owns 5,526,725 shares of the industrial products company's stock valued at $660,444,000 after purchasing an additional 18,759 shares during the last quarter. Institutional investors and hedge funds own 87.96% of the company's stock.

About Xylem

Xylem Inc NYSE: XYL is a global water technology company that designs, manufactures and services engineered systems and equipment for the transport, treatment, testing and efficient use of water. Its product portfolio spans pumps and pumping systems, valves, filtration and disinfection equipment, sensors and analytical instruments, and digital solutions for monitoring and control of water infrastructure. Xylem serves the full water cycle with offerings for water and wastewater utilities, industrial customers, commercial and residential buildings, and agricultural applications.

The company was established as an independent publicly traded company in 2011 following a corporate spin-off from ITT Corporation and is headquartered in Rye Brook, New York.

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