Canaccord Lifts Itron Price Target After Meeting With Management

Itron, Inc. ITRI shares have been on quite a run so far in 2016, but Canaccord believes the stock still has plenty of room to the upside. According to analyst John Quealy, Itron offers investors a favorable risk/reward balance.

Now that project outlook has become clearer and the company’s cost-cutting efforts are starting to make an impact, Canaccord has upped its price target for the Buy-rated stock from $57 to $61.

After meeting with company management, Quealy is bullish on both core metering growth trends and the company’s long-term growth vision.

“In our view, the steady improvement in segment margins is the trend to watch in the coming quarters, given the inherently lumpy cadence of product deployments, as a scorecard on management execution,” Quealy explains.

Related Link: Itron Announces Solid Q2 Results, Plans To Become Leaner

He believes management’s priorities remain predictability, profitability and growth. Quealy notes that roughly 60 percent of Itron’s business now has a “solid visibility.” He expects the company will continue to focus on driving growth in its high-margin software/managed services segments.

“For Riva in particular (still nascent) we note ample potential to broaden the footprint served (given edge computing/sensing analytics and multi-protocol – RF, PLC, Cellular, Wi-Fi – along with notable software-type upsell activity, think $2-3/pm aspirations),” Quealy adds.

Canaccord’s new price target represents nearly 10 percent upside from Itron’s current share price.