DCF Studio

    XYL · NYQ · Industrials

    Xylem Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 59.30

    Market price

    USD 97.26

    Implied upside

    -39.0%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 59.30-39.0%
    Exit multiple
    USD 74.65-23.2%
    Market price
    USD 97.26

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 9.0bnUSD 9.3bnUSD 9.6bnUSD 10.0bnUSD 10.3bnUSD 10.6bnUSD 11.0bnUSD 11.3bnUSD 11.6bnUSD 11.9bn+3.2%
    EBITUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.4bn+3.2%
    NOPATUSD 888.7mUSD 923.1mUSD 957.2mUSD 991.0mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.2bn+3.2%
    Add depreciation & amortisationUSD 517.4mUSD 537.4mUSD 557.3mUSD 577.0mUSD 596.3mUSD 615.3mUSD 633.9mUSD 651.9mUSD 669.3mUSD 686.0m+3.2%
    Less capital expenditureUSD -332.5mUSD -371.4mUSD -412.1mUSD -454.6mUSD -498.7mUSD -544.4mUSD -591.5mUSD -639.9mUSD -689.4mUSD -739.8m+9.3%
    Capex, % of revenue3.7%4.0%4.3%4.6%4.8%5.1%5.4%5.7%6.0%6.2%-
    Less increase in working capitalUSD 17.1mUSD -70.3mUSD -69.8mUSD -69.0mUSD -68.0mUSD -66.7mUSD -65.1mUSD -63.3mUSD -61.1mUSD -58.7m-
    Free cashflow to firmUSD 1.1bnUSD 1.0bnUSD 1.0bnUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bn-0.3%
    Discount factor0.95910.88240.81180.74680.68700.63200.58140.53490.49210.4527-
    Present valueUSD 1.0bnUSD 899.0mUSD 838.2mUSD 779.9mUSD 724.0mUSD 670.6mUSD 619.8mUSD 571.5mUSD 525.7mUSD 482.5m-
    Present Value Of The ForecastUSD 7.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.996Reported 0.994, pulled toward 1.0 (Blume)
    Cost of equity9.11%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 45.7x interest cover. Book interest / average debt was lower, at 1.4%.
    Market capitalisationUSD 22.3bn91.5% of capital
    Total debtUSD 2.1bn8.5% of capital, book value as a proxy
    Tax rate18.7%Effective, capped at statutory
    WACC8.70%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 59.30

    52% of EV

    Forecast FCFF, final year
    USD 1.1bn
    Capex at depreciation, working capital in reinvestment
    USD 1.5bn
    Less reinvestment at g/ROIC (28.7% of NOPAT)
    USD -425.4m
    Capitalised
    USD 1.1bn
    ROIC (WACC floor)
    8.7%
    Terminal value, undiscounted
    USD 17.4bn
    Terminal value, discounted
    USD 7.9bn
    Enterprise value
    USD 15.1bn
    Less net debt
    USD 584.0m
    Equity value
    USD 14.5bn

    Exit at 12.0x EBITDA

    Value per shareUSD 74.65

    62% of EV

    Terminal value, undiscounted
    USD 25.7bn
    Terminal value, discounted
    USD 11.6bn
    Enterprise value
    USD 18.8bn
    Less net debt
    USD 584.0m
    Equity value
    USD 18.2bn

    Spread between methods: 23%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.70%82.0881.8181.7081.8482.34
    7.70%69.2568.3467.4266.5165.60
    8.70%60.8260.0659.3058.5357.77
    9.70%54.1653.5152.8652.2151.56
    10.70%48.7548.2047.6447.0846.52

    Outlined: this model. Green text: above today's price of 97.26. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year17.8%2.8%9.3%
    EBIT margin14.7%12.2%21.4%
    Discount rate-8.7%6.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.