At the current price of $91, what are market expectations regarding Itron’s future operating performance? To achieve average annual stock market performance of 9.0% over the next 6 years, Itron shares will need to reach $153. To achieve Upper quartile performance, Itron’s stock price will need to reach $181 by 2028.
Executive Summary
- Price Target Research identifies Itron as having: average profitability, instability, very low expected growth, and low financial strength.
- Average valuation, above market shareholder returns. Current valuation levels are average relative to the Itron Peer Group. Recent market returns have outperformed the Itron Peer Group. Total shareholder returns expected to significantly lag the overall equity market. Based on current investor expectations, Itron shares should reach a level of $42 by 2028 — an -12.1% per year total shareholder return. A 2028 stock price of $153 would reflect median performance and a price of $181 would be required to reach upper quartile performance.
- Itron’s historical growth is average. Historical growth has been average relative to the Itron Peer Group and forecasted growth is relatively very low. Equity Growth has been superior. Revenue Growth has lagged. Itron’s historical income statement growth and balance sheet growth have diverged. Revenue growth has paralleled asset growth; earnings growth has exceeded equity growth resulting in an improving return on equity. Itron’s consensus growth expectations are lower than historical growth.
- Profitability is slightly above average. The company has very low cash and will have to work to generate attractive investments and improve valuation.
- Itron’s risk profile is neutral. Overall variability has been very high with very high revenue variability, very high E.P.S. variability, and only average stock price volatility. Financial Strength is very low and earnings’ expectations are relatively high. The debt/capital ratio has declined very significantly.
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