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Itron, Inc. Message Board

  • ehaninc ehaninc May 27, 2011 11:56 AM Flag

    Baird Downgrade

    Baird analyst does not show up on the list of star analysts. Quealy does and here is what he says:

    May 27, 2011 8:40 AM EDT

    Canaccord Genuity reiterates a 'Buy' on Itron (NASDAQ: ITRI), PT $80.

    Canaccord analyst, John Quealy, said, "Developments over the next year will indeed be transformational, in our view, as realignment activities, potential M&A and elevated R&D investment serve to set the stage for achieving long-term goals. While Street sentiment stays subdued, we continue to be “contrarian” and find the risk/reward very compelling as the unwavering commitment to growth, technical innovation and financial strength remains."

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    • Utilities are projected to make large investments in infrastructure, according to this paper at Robert Baird. This suggests, to me, lots of business for Itron. I wonder if the analyst at Baird, the one who downgraded Itron, was aware of this report.
      Looking Down the Road
      Persistent unemployment, significant new natural gas supply in North America, an old and capacity-stretched infrastructure system and pending environmental regulations could refuel efforts to establish federal policy for U.S. infrastructure in 2011. Grasping this unique set of challenges and uncertainties, stakeholders could be catalyzed to reaccelerate infrastructure investment. Baird’s expected timeline:
      Near term (now through 2012) — EPS growth is expected to remain subdued except for water utility companies that continue to invest in infrastructure. With significant federal policy uncertainties, electric and natural gas infrastructure investment will likely remain curtailed. Similar to past cycles, potential EPA action by next spring could get infrastructure investment rolling by 2012, helping to once again provide an investable sector theme.
      Long term (post-2012) — accelerating electric and NG infrastructure investment is expected to boost EPS growth to attractive levels. Over the next 10 years, EPS growth averaging 5–8% should fuel attractive total returns as utility companies accelerate infrastructure investment. Pending EPA environmental rulings could prompt the retirement of 40–60 GWs of U.S. coal-fired generation. An estimated $1 trillion in infrastructure investment is needed to improve and maintain reliability, meet customer needs and comply with increased environmental standards in the next 10 years. Estimated water infrastructure needs total $100 billion, natural gas $100 billion and electric infrastructure more than $700 billion.
      Convergence of water, natural gas and electric infrastructure investment could provide an uplift to capital expenditure forecasts. Similar to the increased interdependence of the natural gas and electric sectors once natural gas became an important fuel source for electric generation, we expect water supply concerns and challenges to fuel additional infrastructure investment opportunities in the future for water, electric and natural gas utilities. This convergence could expand infrastructure investment needs as stakeholders evaluate total system solutions, including supply, storage, efficiency, conservation, recycling, and improved system reliability and optionality.

      • 2 Replies to lord9090
      • Gives one an idea of how unreliable these analysts ratings can be;their track record sucks as a group.Once in awhile some individual can be right but I wouldn't be able to tell you who or when,ha,ha.

      • The downgrade obviously slammed the stock. I've read lately some analysts are negative on utilitiy meters because of weak residential contruction and overall real estate malaise.

        Weak new construction may be somewhat of a headwind but I personally see it more your way 9090. The metering equipment upgrades look pretty positive to me. The smart meter deployment in Europe is mandated by the government as I recall from the most recent CC.

        I think this company could be aquired. See Landis.

        Baird probably has a big client that wants to accumulate shares.

    • I also could not find Robert W Baird on a list of star analysts.
      Seeking Alpha had a strong endorsement of this company, yesterday, with a one year target price of $73.
      S&P gives the company a 4 star rating with a one year target price of $72.

    • was this really from this morning?

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