Canaccord Still Buyers Of Itron Shares Despite Stock's Recent Rise

Despite the strong out-performance in Itron's stock, the risk reward profile is "favorable," at least according to John Quealy of Canaccord Genuity.

In a research report on Thursday, Quealy suggested that investors continue "building on existing positions" as his bullish stance continues to play out. Specifically, the analyst highlighted a cyclical upswing in utility metering spending and the company's cost-optimization efforts which will drive "significant earnings power enhancements."

Related Link: Itron Announces Solid Q2 Results, Plans To Become Leaner

Commenting on Itron's "very strong" second-quarter results, the analyst noted that a top- and bottom-line beat came at a time when the company faced increased costs related to an audit re-exam process.

Quealy added that revenue was also very strong for the second straight quarter, led by electric and gas gains. Meanwhile, growth in "smart" volumes rose 25 percent year-over-year and was driven by AMI contract deliveries.

In addition, the company boosted its full-year fiscal 2016 revenue/EPS outlook to $1.95 billion to $2.0 billion/$2.20–$2.245 from a prior $1.85 billion to $1.95 billion/$1.95 to $2.25.

Quealy also stated that the next catalyst for Itron's stock will be its filing of the regulatory 10-Q, followed by a meeting with the company's management.

Shares remain Buy rated with a price target boosted to $57 from a previous $50.

At time of writing, Itron shares were up 2.93 percent on Friday, trading at $52.44.

Full ratings data available on Benzinga Pro.