Piper Jaffray Reiterates Neutral Rating on Badger Meter (BMI)

Piper Jaffray is out with a research report this morning, where their analysts reiterated their Neutral rating on shares of Badger Meter BMI; they have a $42.00 price target on the stock. Piper analysts said, “Following meetings with Badger Meter and several other 'smart' meter providers at the AWWA ACE 2010 tradeshow, we have increased conviction that AMR & AMI technology is gaining traction in the water sector. Competition appears to be heating up – with new product introductions unveiled at this and recent tradeshows - though the market opportunity remains significant with adoption rates still at low levels in the U.S. water sector. While BMI shares offer pure-play exposure, we believe the stock is fairly valued and prefer names that offer broader geographic exposure.” They added, “With a long track record of both traditional and AMR meters in the field, Badger is a trusted brand in the U.S. market. The Orion and Galaxy product lines have been transformative for BMI, and the Shreveport, LA and Fresno, CA AMI contracts illustrate the company's progress in this regard. We share BMI's view that AMI will garner an increasing share of the industry, with perhaps 50% of new installments (up from 15%) not unrealistic in 10 years. In total, the space is becoming more crowded, but given the rational pricing history of this market, pricing pressure has yet to emerge.” Piper Jaffray cites valuation for their Neutral rating. Learn how to find the best stocks to trade each day in our 70 page E-Book and 90 minute online video for free.