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Analyst Blog

Shares of Itron, Inc. (ITRI - Analyst Report) attained a 52-week high of $55.31 on Sep 21, before closing lower at $55.26. This new high was driven by the company’s continuous focus on its restructuring strategy, backlog strength and product development.

Itron has a market capitalization of roughly $2.1 billion. Average volume of shares traded over the last three months is around 242.6K. The stock flaunts a strong one-year return of over 76% and a year-to-date return of nearly 53%. Moreover, it has beaten the Zacks Consensus Estimate in two out of the trailing four quarters, with an average positive surprise of 16.36%.

ITRON INC Price and Consensus


ITRON INC Price and Consensus | ITRON INC Quote

Factors to Consider

In Nov 2014, Itron approved restructuring projects to streamline its Electricity business and related general and administrative activities, along with certain Gas and Water activities for improving operational efficiencies and reducing expenses. The 2014 projects include consolidation of certain facilities and reduction of its global workforce. The improved structure will help Itron to meet long-term profitability goals by better aligning its global operations.

Further, on Sep 1, 2016, the company announced projects (2016 projects) to restructure various activities in order to increase operational efficiencies, reduce expenses and improve competitiveness. Itron expects to close or consolidate several facilities, and trim global workforce as a result of the restructuring. The 2016 projects, which will begin immediately, are expected to be substantially completed by 2018 end and generate annualized savings of approximately $40 million thereafter.

Notably, Itron had bookings of $394 million in the second quarter of 2016. The company reported 12-month backlog of $688 million and total backlog of $1.3 billion during the reported quarter. Strong backlog performance depicts a healthy amount of utility and municipal spending on smart systems and analytics, and growing customer demand in all three end markets of the company, namely Electricity, Gas and Water. Further, several upcoming projects will help increase its backlog visibility for 2016.

Finally, Itron expects to grow through a combination of new product development, licensing technology, distribution agreements, partnership arrangements and acquisitions. The company believes that these activities will be funded from existing cash, cash flow from operations, borrowings, or the sale of common stock.

Itron currently sports a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Other well-ranked stocks in the sector include Cognex Corp. (CGNX - Snapshot Report) , Advanced Energy Industries, Inc. (AEIS - Snapshot Report) and Applied Materials, Inc. (AMAT - Analyst Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank  stocks here..

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