On Thursday, TD Cowen adjusted its outlook on Itron (NASDAQ: NASDAQ:ITRI), a technology company specializing in energy and water resource management. The firm increased the price target to $136 from the previous $125, while reiterating its Buy rating on the stock. The revision follows Itron's reported earnings, which exceeded expectations and prompted the company to raise its guidance for the year.
The analyst from TD Cowen highlighted that despite a Book to Bill ratio of 0.8x, which is considered soft, there is an anticipated improvement. This optimism is based on the expected increase in load demand and the impact of government funding programs that are likely to boost future bookings. The current Book to Bill ratio is a metric that indicates the company's order backlog compared to its revenues, with a figure below 1.0x suggesting a decline in backlog relative to sales.
Itron's management has indicated that the effects of recent bookings will likely manifest in a lag of 9 to 12 months, translating into a subdued performance in 2025. However, the company is poised for a stronger showing in 2026 as a result of these developments. The forecasted uptick in bookings is expected to begin in the fourth quarter of 2024 and continue into the first half of 2025.
The analyst's statement emphasized the anticipated trajectory for Itron's performance, noting that the stock might experience a period of stabilization before gaining momentum as bookings increase. "Stock likely takes a breather until bookings accelerate in 4Q/1H25," the analyst predicted, suggesting a temporary pause in stock movement before a potential rise in activity based on the company's business prospects.
Investors and market watchers will be keeping a close eye on Itron's booking trends in the coming months, as they could indicate the company's future revenue stream and overall financial health. The updated price target reflects confidence in Itron's ability to capitalize on market opportunities and navigate through the projected softer period.
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