ITRI - Itron down after JP Morgan downgrades on margin recovery concerns

• Itron ( ITRI ) fell 2.08% pre-market on Friday after JP Morgan downgraded the technology and services company on concerns surrounding its pace of recovery in margin.
• The agency lowered its rating on ITRI to Underweight from Neutral, and revised the price target to $50 from $53.
• "While demand remains strong as evidenced by record backlog, we believe the long delivery cycles for ITRI will lead to margins not fully recovering from supply chain headwinds for the foreseeable future," JP Morgan said in a note.
• The agency lowered its FY24 EBITDA estimates to $193M from $265M, considering that its prior estimates relating to margin expansion in FY24 were too aggressive. The Wall Street consensus is $190M.
• JP Morgan, however, maintained its FY23 estimates.
• The sell-side analysts give the company a Buy rating on average, with a price target of $57.75.
• Meanwhile, Seeking Alpha authors and the Quant Rating system give to the stock a Hold rating.
• Itron continues to struggle from a sales and cash flow perspective, according to SA author Daniel Jones.
• The market seems to be paying more attention to growing backlog, but even with that good news, there is too much uncertainty to make me comfortable, Jones said.

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