JP Morgan is removing Itron (NASDAQ:ITRI) from the JP Morgan Focus List as the stock price has exceeded their December 31st 2007 price target of $69.
Firm says some near-term caution is justified. They believe ITRI remains undervalued and there is potential for upward revisions to their EPS estimates for FY08 and beyond. However they don't expect significant growth of backlog in the next six months. In firm's view, large-scale AMI contracts will not be awarded until utilities have been able to assess the benefits of early AMI deployments in California and Ontario. They expect large awards to be made in late 2007/early 2008.
Firm also believe there's near-term risk associated with the pending Actaris acquisition. At minimum, ITRI will be hit with significant non-cash GAAP charges, but there might also be some near-term integration challenges. They expect the accretive benefit of the transaction to become evident in 2H07 - which might also justify revisions to EPS.
Notablecalls: ITRI is a mover and today the move is to south. After such a run hearing to be cautious will push at least some weaker hands to lock profits.