Itron’s Stock (ITRI) Reverses From High: JP Morgan Raises Target, Calls For Dip To Be Bought

Itron's stock price (NASDAQ: ITRI) came down from ATHs today, and sharply reversing lower to close the day out 10.5% down. Despite the pullback, JPMorgan have upgraded the stock, seeing a dip buy opportunity off the back of Q2 earnings weakness in the market. 

JPMorgan's upgrade of Itron to Overweight from Neutral, accompanied by a price target increase to $145 from $128 went as far as to say “Investors should buy the dip”.

This bullish outlook followed Itron's Q2 performance, where the company reported gross margin, EBITDA, and EPS exceeding expectations, despite revenue aligning with forecasts.

While Itron raised its FY25 EPS guidance, it lowered its revenue outlook, attributing this adjustment to temporary timing delays in backlog deliveries.

JPMorgan analysts, however, view these headwinds as transient, expressing confidence in Itron's margin trajectory and suggesting investors take advantage of any price weakness.

However, investors should also consider potential risks. While JPMorgan considers revenue delays temporary, prolonged delays could impact future earnings. Furthermore, broader economic uncertainties and potential shifts in the utility-scale renewable energy market, as flagged by JPMorgan in their broader sector analysis, could indirectly affect Itron.

Despite potential headwinds, institutional investors appear to maintain a positive outlook on Itron. Several hedge funds have recently adjusted their positions, with Norges Bank acquiring a new position worth approximately $64.6 million and UBS Asset Management Americas LLC increasing its holdings by 129.7% in the first quarter.

Looking to wall street, analysts have an average price target of $136.91 for ITRI, with a high of $155, and a low of $110, with a median sentiment of “Buy” or “Strong Buy,”. The view is that Itron's strong fundamentals, coupled with growing demand for its smart infrastructure solutions, support a positive long-term outlook.

The key to future gains will depend on Itron's ability to execute on its backlog, manage supply chain challenges, and capitalize on growing demand.