On Thursday, Piper Sandler adjusted its price target for Itron (NASDAQ:ITRI), a technology company specializing in energy and water resource management, to $103 from $105. The firm maintained its Overweight rating on the stock. Piper Sandler expressed continued confidence in Itron, highlighting the company as one of their top picks following its recent investor day.
The firm is positioned at the higher end of the earnings per share (EPS) guidance for the first quarter, anticipating a possible modest outperformance relative to market expectations. This outlook is somewhat tempered compared to previous quarters.
Piper Sandler's analysts believe that Itron's conservative management approach may offer some upside for the company's performance in 2024, with greater optimism projected for 2025. This optimism is based on the expectation that the backlog of non-inflation-indexed network solutions will clear and that further rationalization of factory capacity will lead to improved profit margins.
Looking further ahead, Piper Sandler sees Itron as standing to benefit from increased demand for advanced energy resource management at the grid's edge, which is expected to become more significant. The firm anticipates that this will positively impact Itron's networked solutions and outcomes business, contributing to ongoing margin growth.
Additionally, the combination of margin expansion and a predictable revenue stream is believed to potentially lead to a reevaluation of the company's market multiple.
The slight adjustment in the price target to $103 reflects a modest reduction in the firm's fiscal year 2027 estimates. Despite this, Piper Sandler's stance on Itron remains positive, with the company continuing to be a preferred choice within its sector.
InvestingPro Insights
As Piper Sandler maintains a positive outlook on Itron, with a revised price target of $103, real-time data from InvestingPro provides further context for investors. The company's market capitalization stands at $4.15 billion, and it's trading at a P/E ratio of 42.47, which is adjusted to 32.7 for the last twelve months as of Q4 2023. This high earnings multiple aligns with one of the InvestingPro Tips, suggesting that Itron is trading at a premium valuation. Additionally, the company has demonstrated a robust revenue growth of 21.06% over the last twelve months, indicating a strong upward trajectory in sales.
InvestingPro Tips also highlight that Itron's liquid assets exceed its short-term obligations, providing a level of financial stability. With moderate levels of debt and a return on assets of 3.95% for the last twelve months as of Q4 2023, Itron appears to be managing its leverage effectively while generating returns. Notably, the company's stock has seen a significant price uptick over the last six months, with a 56.13% return, and is currently trading near its 52-week high, at 94.78% of the peak price.
For investors seeking more in-depth analysis, InvestingPro offers additional insights on Itron, including 10 more InvestingPro Tips that could be pivotal for making informed decisions. To access these insights, consider subscribing to InvestingPro with the special coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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