Tale Of Two On Itron (ITRI): Janco Downgrades, Needham Upgrades

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09:05:30 pm on February 18, 2010

Itron (ITRI) reported strong earnings results after the bell last night and two brokerages came out with notes on the quarter today.  Needham upgraded Itron from Hold to Buy and raised the price target to $69 while Janco Partners downgraded it from Accumulate to Market Perform due to valuation and lack of international growth.  Hat tip to Street Insider for the following analyst comments:

Janco: “Yesterday the Company reported fourth quarter results after the close of trading beating both our own and Street estimates. The company reported fourth quarter revenues of $476.8 million translating into non-GAAP EPS of $0.82. We were looking for revenues of $446.1 million translating into $0.61 in earnings per share. The Street estimate prior to the call was for $434.5 million in revenues and $0.60 in earnings per share. Our FY2010 revenue estimates remain largely unchanged as increased organic or un-stimulated growth is offset by lower international revenue projections. We are slightly increasing our valuation multiple to take into account this stronger than expected domestic growth. Applying estimate of $269 million results in a price target of $67.00. Due to the lack of upside from yesterday’s closing price to our price target we are downgrading 12.5X TEV/EBITDA multiple, up from our previous multiple of 12X, to our FY2010 g the stock to Market Perform.”

Needham: “Overall, Itron is well positioned for growth in 2010 (and beyond) with record 12-month backlog and a strong portfolio of customers to drive its AMI business. Further, we believe the company’s visibility continues to improve (in the wait and see smart metering environment) while valuation has also become more compelling. Consequently, we are upgrading from Hold to Buy and instituting a target of $69 based on ~23x our 2010 estimate of $2.98.”

Shares of ITRI surged 8% today on strong volume, pushing further off support of the 200 day moving average and above resistance of the 50 day moving average.

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