Echelon (ELON) Surges on Cantor Fitzgerald Buy Recommendation

Echelon (ELON), a significant, but unprofitable player in the smart metering industry, surged 13% today with decent volume following a BUY initiation and price target of $9.50 from Cantor Fitzgerald.  According to the, Cantor had this to say:

“The shares are trading close to their 52-week low in a challenging equity market. We believe the company has strong growth prospects in 2010 and beyond as the world moves to upgrade its electric grids with smart metering technology. Echelon has provided its technology to more AMI meters than any other supplier in the world, and has a significant market share in many major installations. We believe the company has trials and deployments with some 100 potential customers with a potential market of approximately $60 billion. Even a small fraction of new wins would justify our target price. Furthermore, the American Recovery and Reinvestment Act (ARRA) allocates billions of dollars for smart grid projects that we believe will stimulate investor interest once details are clear. The company has a strong balance sheet with $87 million in cash and a strong management and technical team that we think is well positioned to take advantage of worldwide opportunities.”

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