NEW YORK (TheStreet) -- Shares of Xylem (XYL) - Get Report were falling early Tuesday morning as analysts at Canaccord increased their price target on the stock to $50 from $45.

The firm has a "hold" rating on the Rye Brook, NY-based water industry technology company.

"The company is executing well through choppy markets and we see ample room for margin enhancement," Canaccord said in a note released this morning. "While short-cycle visibility will stay variable, product breadth and organizational optimization efforts support more consistent results."

Xylem announced yesterday that it would acquire privately-held smart water meter company, Sensus USA, for approximately $1.7 billion. The deal is expected to close by year's end.

"At first glance we like the fit, as Sensus looks to serve as an R&D 'springboard' into broader systems intelligence capabilities, while being immediately accretive to margins and cash flow," Canaccord said of the deal.

The firm added that Xylem will benefit from "larger synergistic opportunity" in its revenues.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rated this stock as a "buy" with a ratings score of A+.

The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: XYL

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