Kaufman Bros. Initiates Coverage on Itron (ITRI) with a Hold

November 25, 2009 7:06 AM EST

Kaufman Bros. initiates coverage on Itron, Inc. (NASDAQ: ITRI) with a Hold. Price target $70.

Kaufman analyst says, "We believe Itron is well positioned to benefit primarily from an upgrade to the electrical grid in the U.S. and Europe that is currently under way. We believe that if it maintains its share of the market it could see an incremental $18 billion in revenue over the next few years. Itron is the world leader in the electric, gas and water meter market, which is dominated by Itron, Elster Group and Sensus. There are large barriers to entry and its intellectual property includes nearly 1,000 patents and hundreds more in filed applications. Because of this and its current stance as the world's largest utility meter maker, we believe it is likely to maintain its market share."

"Given the early stages of the Smart Grid implementation (only 8% penetration on average) and the uncertainty of stimulus/subsidy funding as well as potential margin pressure coming from new product introductions, we are initiating coverage with a HOLD rating. That said, long-term fundamentals look good and we would become incrementally more positive on the stock as we see evidence of stimulus rollout."

To see all the upgrades/downgrades on shares of ITRI, visit our Analyst Ratings page.

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