- JP Morgan notes they believe the adoption of Advanced Metering Infrastucture (AMI) will drive re-acceleration of growth for Itron (NASDAQ:ITRI) in 2007, however the size and complexity of AMI contracts may lengthen the sales cycle and push ITRI's top-line re-acceleration into late2007/early 2008.
The firm is therefore trimming their 2007 estimates to align more closely with the November 1st guidance; 10-22% PF EPS growth on 5-11% sales growth. Firm's revised forecast of $2.72 PF EPS on sales of $689mm, puts us at the mid-point with PF EPS growth of 14% on sales growth of 7%. The revision should also re-set consensus at a more conservative level that will allow for more constructive interpretation of results.
They leaving their Focus List Price Target unchanged at $69, but are revising target date to December 31st, 2007. The target date reflects firm's view of the appropriate time-horizon in which the AMI investment thesis plays out. The price target is based on an assigned P/E multiple of 22 times 08 PF EPS of $3.12. JP Morgan originally added ITRI to the focus list on July 10th at $53.15, with the expectation of a 30% return in one-year, which now turns into a 17-month time-horizon.
Notablecalls: JP Morgan has been one of the more outspoken bulls on ITRI. Now their 2007 EPS est is a tad below consensus. I'm not sure this will have an immediate impact on the stock price but I would not be surprised to see ITRI lower from current levels at some point between now and Dec 31 2007.
The firm is therefore trimming their 2007 estimates to align more closely with the November 1st guidance; 10-22% PF EPS growth on 5-11% sales growth. Firm's revised forecast of $2.72 PF EPS on sales of $689mm, puts us at the mid-point with PF EPS growth of 14% on sales growth of 7%. The revision should also re-set consensus at a more conservative level that will allow for more constructive interpretation of results.
They leaving their Focus List Price Target unchanged at $69, but are revising target date to December 31st, 2007. The target date reflects firm's view of the appropriate time-horizon in which the AMI investment thesis plays out. The price target is based on an assigned P/E multiple of 22 times 08 PF EPS of $3.12. JP Morgan originally added ITRI to the focus list on July 10th at $53.15, with the expectation of a 30% return in one-year, which now turns into a 17-month time-horizon.
Notablecalls: JP Morgan has been one of the more outspoken bulls on ITRI. Now their 2007 EPS est is a tad below consensus. I'm not sure this will have an immediate impact on the stock price but I would not be surprised to see ITRI lower from current levels at some point between now and Dec 31 2007.
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