UPDATE: Gabelli & Co. Initiates Buy, $38 PT on Xylem

Gabelli & Co. Initiates a Buy rating and $38 price target for 2012 on Xylem (NYSE: XYL) as it believes the company will generate revenues of $3.7 bn, EBITDA of $536 mm, and earn $2.00 per share in 2011.

Gabelli & Co. says, " Xylem's attractive business mix generates strong cash flow. The company generated an average of $400 mm. EBITDA over the last three years, and we expect EBITDA to grow to over $750 mm in 2015, representing a CAGR of 9% through 2015."

XYL closed at $24.91 per share on Friday.