Sempra Energy (SRE) will soon make an announcement as to which company will win the estimated $400 million smart meter contract. It had been thought that Itron (ITRI) would win the contract, but today Esco Technologies (ESE) announced it was selected by Sempra for “negotiation of a definitive agreement”.
RBC Capital Markets analyst Stuart Bush called the move unusual and said it implies Esco has a leading position in negotiations. Stifel Nicolaus analyst Jeff Osborne said the contract was part of the bullish case for Itron and would be a major loss. Couldn’t have put it better myself. As the stock was getting crushed, down nearly 15%, JP Morgan defended the stock saying that Itron could still win a piece of the Sempra business. It sent shares about 10% off the lows, closing down less than 8%. Esco shares soared nearly 25% today, helping make the case that the $25 level will hold as a major area of long term support.
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