Shares of Itron, Inc. (Nasdaq: ITRI) are under heavy pressure today after Maryland's Public Service Commission revealed that BG&E is working with Silver Spring Networks for its smart metering platform, not Itron.
Commenting on the news, analyst at Deutsche Bank said, "If BG&E gets regulatory approval (next hearings on 8/5/10 and 8/6/10) and partners with SSN (not a certainty at this point, but very likely), there would not be any impact to our 2010 or 2011 EPS estimates for Itron."
Deutsche Bank thought that Itron only had a 30% chance of winning this contract. If they had won it would have added $0.15-0.20 of upside to the firm's 2011 EPS estimate.
While they remained concerned about Itron's limited AMI pipeline and recent share loss, they are reiterating our Buy rating as we see significant upside to the Street's 2010 estimates and opportunities in the EU market.