Itron (ITRI) Is In the Early Stages of a Turnaround - Wedbush

Wedbush analyst, David Rose, thinks that Itron (NASDAQ: ITRI) is in the early stages of a turnaround, based on improving margins and an impressive bookings figure. There is still execution risk but the elements are in place with Q4 results providing good evidence of progress. No change to the Outperform rating but the PT increases to $46.

The company reported adjusted EPS of $0.76 versus the consensus $0.74. Revenues were slightly ahead of consensus and adjusted EBITDA of of $53.0 million was in line. GAAP EPS was $0.56 and included $7.9 million in amortization of intangibles and approximately $1.0 million (pre-tax) in restructuring charges.

Total backlog was $1.550 billion with 12 month backlog at $833 million, up 12% over the prior year. Bookings of $822 million was up from $648 the prior year for a book to bill of 1.05.

Adjusted operating margins increased from 5.7% to 9.0%, led by impressive improvement in Electricity and Gas. Electricity margins increased 460 bps to 10.5%, while Gas margins increased from 9.1% to 16.4%.

Even after giving the business a 10% discount to peer multiples for performance volatility, the 12 month price target rises to $46 from $42.

For an analyst ratings summary and ratings history on Itron click here. For more ratings news on Itron click here.

Shares of Itron closed at $36.50 yesterday.

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