ITRI: Elevated Power Capex Will Support Long-Term Utility IoT Momentum

Analysts have nudged their price target on Itron slightly lower to about $140 from roughly $140.40, reflecting modest dilution from recent deals. They also highlight the company’s leading position in utility IoT, exposure to elevated power capex, and solid long term cash flow visibility as support for the stock.

Analyst Commentary

Recent Street research on Itron reflects a generally constructive stance, with adjustments to price targets and ratings framed around the company’s execution trajectory and its leverage to long duration infrastructure spending.

Bullish Takeaways

• Bullish analysts emphasize Itron’s leading role as an IoT provider for utilities, viewing its dominant competitive position as a key driver of sustainable growth and supporting premium valuation multiples.
• Several notes highlight that utility capital expenditure remains upwardly biased for years to come. This is expected to underpin re accelerating sales and reinforce confidence in long term revenue visibility.
• Despite near term order weakness, bullish analysts argue that the equity pullback has more than discounted these risks. They see this as creating an attractive entry point relative to the company’s long term earnings power.
• JPMorgan’s higher price target is tied to Itron’s exposure to U.S. based manufacturing, diversified end markets, and strong cash flow visibility. These factors are seen as differentiators within the broader clean energy and grid modernization universe.

Bearish Takeaways

• Bearish analysts cite modest dilution from recent deals as a headwind to near term earnings per share. This has led to incremental pressure on price targets even as ratings remain supportive.
• Order softness around the latest quarter raises concerns about short term execution risk, with some investors wary that a slower booking cadence could delay the timing of the anticipated re acceleration in growth.
• There is caution that expectations for sustained elevated power capex may be vulnerable to macro or policy shifts, which could introduce downside risk to current growth and valuation assumptions.
• With the stock still trading near the lower end of its recent range, some bearish analysts remain skeptical that the market will fully re rate Itron until evidence of stronger order momentum and margin follow through becomes more visible in reported results.

What's in the News

• The Board of Directors authorized a new share repurchase plan, with Itron set to buy back up to $250 million of common stock over the next 18 months (Buyback Transaction Announcements).
• The company issued revenue guidance for the fourth quarter of 2025 of $555 million to $565 million and full-year 2025 revenue of $2.35 billion to $2.36 billion, underscoring confidence in the growth outlook (Corporate Guidance).
• Itron launched its Gen6 network platform and latest UtilityIQ application suite, extending cellular and mesh connectivity to more devices and enhancing multivendor interoperability for utility customers (Product Related Announcements).
• Itron is collaborating with Northumbrian Water Limited on the deployment of 330,000 smart water meters with Cyble 5 communication modules by 2029, expanding its presence in the U.K. water sector (Client Announcements).
• New strategic alliances in grid edge intelligence and smart cities, including projects with utilities in the Philippines and American Samoa, as well as fleet electrification and smart lighting initiatives, are broadening Itron's international footprint and use cases (Strategic Alliances and Client Announcements).

Valuation Changes

• Fair Value Estimate has edged down slightly to about $140.20 from roughly $140.40, reflecting modest dilution from recent transactions.
• Discount Rate has risen slightly to approximately 9.21 percent from about 9.18 percent, implying a marginally higher required return on equity.
• Revenue Growth Outlook is effectively unchanged at about 5.99 percent, indicating a stable top line trajectory in the valuation model.
• Net Profit Margin Assumption remains essentially flat at around 14.22 percent, signaling no material shift in long term profitability expectations.
• Future P/E Multiple has ticked down slightly to roughly 21.0x from about 21.1x, a minor compression in the valuation multiple applied to forward earnings.