Itron downgraded at Argus on 'murky' earnings picture

Itron (ITRI) -0.4% in Tuesday's trading as Argus downgraded shares to Hold from Buy, noting the shares have advanced more than 50% since the firm's upgrade in August 2023, meaning investors can consider locking in profits at current levels.

Itron (ITRI) has been shifting its focus from standalone, "non-communicating" devices toward smart networks and customized solutions, and should see growth opportunities in the coming years as customers work to strengthen their infrastructure and grid management capabilities amid increased demand for electricity and water resources from data centers, electric vehicles, and infrastructure automation, Argus analyst John Eade wrote.

However, Itron's (ITRI) current earnings picture is "a bit murky," Eade said, noting the company's non-GAAP guidance calls for 20%-plus EPS growth, but management also has said that growth is in the mid-teens normalized for taxes, and management noted in the Q3 earnings call that order growth has slowed sharply.

On a fundamental basis, Itron (ITRI) trades at 16x Argus' FY 2026 adjusted earnings estimate, pulling back from all-time highs to the bottom of the historical range of 16x-30x amid the "earnings confusion," and Eade said the low multiple reflects the murky outlook on earnings; until the earnings outlook clarifies, the analyst thinks a Hold rating is appropriate.