Stifel Nicolaus analyst Nathan Jones upgraded the rating on Badger Meter to a Buy yesterday, setting a price target of $215.00.
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Nathan Jones has given his Buy rating due to a combination of factors that highlight Badger Meter’s strong growth potential and financial stability. The company is benefiting from a secular growth trend driven by the ongoing AMI upgrade cycle, which is expected to continue contributing to its expansion. Additionally, concerns about reduced stimulus funds and federal funding cuts are seen as exaggerated, suggesting that the negative sentiment surrounding these issues will dissipate.
Badger Meter’s robust balance sheet, characterized by $200 million in cash and no debt, positions it well for strategic investments that can enhance customer relationships and broaden its service offerings. The company’s valuation multiples have been adjusted to more accurately reflect its long-term growth prospects, with expectations of mid-teens earnings per share growth. Furthermore, the SmartCover segment is showing promising revenue growth and is anticipated to become accretive to earnings per share in the near future, further supporting the Buy rating.
Jones covers the Industrials sector, focusing on stocks such as Parker Hannifin, ITT, and Valmont. According to TipRanks, Jones has an average return of 20.2% and a 71.20% success rate on recommended stocks.