Xylem CEO Wants More Sales From Emerging Markets, Citigroup Says

Jun 20, 2014 1:00 pm ET

June 20 (Bloomberg) -- Xylem Inc., a New York water technology company, wants to increase its revenue from emerging markets, according to a Citigroup Inc. analyst, citing a management dinner with new Chief Executive Officer Patrick Decker.

Xylem, with an estimated 17 percent of sales from emerging markets now, isn’t likely to make acquisitions at present though purchases are part of the strategy, wrote the analyst, Deane Dray, who rates the stock neutral. Decker took over the top spot at the Rye Brook, New York-based company in March.

Companies like Xylem are seeking to tap pieces of what Dray calls a $450 billion water industry that includes desalination, ballast water filtration, power generation and hydraulic fracturing. Xylem is the biggest publicly traded “pure play” company with more than 90 percent of its revenue tied to water and water processing, Dray said.

“Xylem does plan to be a component supplier of UV systems to this new market,” he said in the note.

Water reuse, filtration and industrial water treatment are among the most attractive markets for water technology companies, Dray wrote in a separate note.