Pentair upgraded, Xylem downgraded by analysts at Stifel (NYSE:PNR)

Pentair (NYSE:PNR) on Monday was upgraded to a Buy investment rating from Hold by analysts at Stifel who also downgraded Xylem (NYSE:XYL) to Hold from Buy.

The price target for water-treatment company Pentair (PNR) was raised to $57 a share from $46 as Stifel added the stock to “select list” of top picks.

“2022 has been a difficult year for PNR shares as the overhang from potential demand pull forward during COVID and inventory destocking to come have weighed heavily on investor sentiment,” Nathan Jones, analyst at Stifel, said in a report. “We believe we are approaching the end of the tunnel with clarity likely coming in the next quarter.”

The investment bank’s price target for water-technology company Xylem (XYL) was raised to $115 a share from $113. The rating downgrade results from the stock’s valuation of 22 times Stifel’s EBITDA estimate for 2023.

“Demand prospects remain strong for most of Xylem’s (XYL) businesses and the more cyclical ones in industrial and commercial are likely to be less cyclical than people think,” the Stifel report said. The current valuation “presents investors a fair risk/reward proposition and so are stepping to the sidelines for now.”