Raymond James starts Badger Meter at Market Perform on peak margin concerns

As previously reported, Raymond James initiated coverage of Badger Meter (BMI) with a Market Perform rating and no price target Although the firm admires the business and its leadership, and suspects there is “potentially significant upside to numbers near term,” it is concerned about recommending shares at what could prove to be “peak multiple and peak margins.” The firm views the current valuation as effectively pricing in a “blue sky” scenario despite what it views as “a fairly significant risk” to industry wide demand as U.S. federal stimulus to water utilities is significantly reduced after 2026, leaving it viewing the current risk reward as not “asymmetrically attractive,” the analyst tells investors.