ITRI: Grid Edge Partnerships Will Support Long-Duration Utility IoT Cash Flows

Analysts have trimmed their price expectations for Itron, with the average target moving from about US$140 to roughly US$137, reflecting slightly lower fair value and P/E assumptions while still citing supportive research updates and recent target revisions.

Analyst Commentary

Bullish Takeaways

Bullish analysts continue to carry Buy ratings even after trimming price targets, which signals ongoing confidence in Itron’s long term execution and earnings potential at current valuation levels.
The Buy rating paired with a US$130 target suggests some analysts still see room for upside based on their assessment of growth in Itron’s end markets and the company’s ability to capture that demand.
Where targets were adjusted for deal related dilution, bullish analysts kept positive ratings, indicating they view recent transactions as manageable for the equity story rather than a thesis breaker.
Supportive research updates that maintain constructive stances, even with slightly lower targets, point to a view that Itron can continue to build on its position in its core markets over time.

Bearish Takeaways

Bearish analysts lowered price targets, including one cut of US$20, which reflects more conservative assumptions around fair value and possibly a tighter margin of safety at prior target prices.
The move from a higher target band around US$140 toward the US$130 to US$138 range suggests some caution around how much investors should be willing to pay on a P/E basis for the current growth profile.
Target reductions tied to dilution from recent deals highlight concerns that incremental share issuance or deal related impacts could weigh on per share metrics, even if operationally neutral.
Where analysts reference expectations for re acceleration in future sales, it also hints at a risk that any delay or shortfall in that trajectory could challenge the more optimistic valuation cases.

What’s in the News

Itron and Toumetis are working with San Diego Gas & Electric on an EPIC-funded project in Southern California, using real-time analytics on smart meter and grid data to help reduce outage frequency and duration and support wildfire mitigation efforts (Strategic Alliances).
Pacific Gas and Electric Company is expanding its use of Itron’s Grid Edge Intelligence solutions, aiming to make home electrification easier, support EV charging without costly panel upgrades, and deploy up to 1,000 new Itron devices through 2026 with potential scale up to hundreds of thousands of devices (Client Announcements).
Itron is highlighting its Grid Edge Intelligence portfolio and new Resiliency Solutions segment at DTECH 2026 in San Diego, focusing on utility-scale distributed intelligence, AI and ML at the grid edge in collaboration with partners such as NVIDIA, Microsoft, AWS and others (Product-Related Announcements).
Itron is deepening its collaboration with Microsoft, including an IEOS Connector for Microsoft 365 Copilot that lets utility users query Itron data in natural language to access information such as consumption patterns and outage history (Strategic Alliances).
Itron is partnering with Snowflake to power its advanced Grid Planning solution, which uses high-performance cloud analytics and an 8,760 hour system-wide analysis to help utilities assess capacity constraints and support distributed energy resource integration (Client Announcements).

Valuation Changes

Fair value has been trimmed slightly from about US$140.40 to roughly US$136.56 per share.
The discount rate has been adjusted marginally lower from about 9.22% to around 9.11%.
Revenue growth has been kept broadly similar, moving from roughly 6.12% to about 6.10%.
The net profit margin has been nudged down from about 14.15% to roughly 14.10%.
The future P/E has eased from around 21.11x to about 20.56x, indicating a slightly lower multiple assumption.

Rising global smart grid demand, digitalization, and IoT adoption are driving sustained revenue growth and expanding high-margin software offerings for Itron.
Structural cost optimizations and a strong project pipeline position Itron for improved margins, earnings growth, and continued contract wins despite potential short-term delays.
Delayed regulatory approvals, utility budget constraints, and slow SaaS growth threaten Itron's revenue stability, margin sustainability, and transformation toward recurring software-driven earnings.

Catalysts

About Itron

A technology, solutions, and service company, provides end-to-end solutions that help manage energy, water, and smart city operations worldwide.What are the underlying business or industry changes driving this perspective?

Expected acceleration in global demand for smart grid infrastructure and advanced metering solutions-driven by government decarbonization mandates, increasing electrification, and urbanization-supports a long-run, expanding addressable market for Itron, providing a clear path to sustained top-line revenue growth.
Ongoing industry-wide digitalization and increased adoption of IoT by utilities are driving higher uptake of Itron's Outcomes (software and analytics) offerings, which are higher margin and boost recurring revenue, supporting continued net margin and earnings expansion.
Company's structural cost optimization (factory closures, portfolio pruning, and focus on high-margin products) is translating into record gross and operating margins, and positions Itron for robust EPS leverage even if near-term revenue growth is muted.
Regulatory support and multiyear increases in utility CapEx budgets enhance Itron's project pipeline and backlog visibility, while any short-term deployment delays appear to simply push revenue into future periods rather than eliminate it-setting up easier revenue comparisons and potential catch-up growth ahead.
Steady success winning large-scale international and domestic contracts (notably with European utilities seeking to upgrade to distributed intelligence platforms and North American water projects) demonstrates Itron's strong competitive position, suggesting positive momentum for future bookings, backlog, and revenue realization.

Itron Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Itron's revenue will grow by 5.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 11.1% today to 13.7% in 3 years time.
Analysts expect earnings to reach $388.8 million (and earnings per share of $8.18) by about September 2028, up from $269.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.5x on those 2028 earnings, up from 20.1x today. This future PE is lower than the current PE for the US Electronic industry at 23.9x.
Analysts expect the number of shares outstanding to grow by 1.39% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.8%, as per the Simply Wall St company report.

Itron Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Customers and regulators are slowing project deployments and delaying decisions due to increased macroeconomic uncertainty, evolving trade policies, and capital budget constraints, which has resulted in Itron lowering its full-year revenue outlook midpoint by approximately 3%; this trend could extend if global trade and political volatility continue, directly impacting revenue growth.
The revenue declines are weighted towards larger, backlog-driven projects which require regulatory approval and complex sequencing; any prolonged delays in regulatory approvals or persistent labor/IT and capital bottlenecks at utilities could cause further revenue deferrals and increase earnings volatility.
Although margins have improved through favorable product mix and cost restructuring, a significant portion of recent margin gains stem from the end-of-life of lower-margin legacy products and facility closures, raising questions about the sustainability of current margin levels and the company's ability to maintain net margins and profitability into the future.
Utility customers are facing heightened ratepayer and regulatory scrutiny regarding retail rate increases, which could slow approval cycles for major technology investments, reduce the pace of smart grid deployments, and introduce new headwinds to Itron's addressable market and long-term revenue pipeline.
The company's strategy involves significant reliance on growing the Outcomes (software/data) segment, but segmental growth dropped below 10% in the reported quarter, raising risk that Itron may be slower to shift toward a higher-recurring SaaS revenue mix than peers, potentially constraining future earnings growth and affecting long-term net margin expansion.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $144.4 for Itron based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $155.0, and the most bearish reporting a price target of just $129.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.8 billion, earnings will come to $388.8 million, and it would be trading on a PE ratio of 22.5x, assuming you use a discount rate of 8.8%.
Given the current share price of $118.76, the analyst price target of $144.4 is 17.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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