FELE - Xylem Worth Another Look After A Big Valuation Reset

• Supply chain issues have led to materially weaker near-term results and guidance, and are likely playing a meaningful role in the recent deflation of Xylem's robust valuation multiples.
• Xylem management doesn't really have many good options for quickly resolving the electronic components sourcing issues, but underlying demand is healthy in utility and industrial markets.
• The company still offers good leverage to pain points in water quality, including testing, treatment, wastewater management, and monitoring.
• The right forward multiple on Xylem is certainly debatable, but the shares look much more interesting on underlying assumptions of mid-to-high single-digit revenue and FCF growth.

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