Shares Of Itron Rise On Stimulus View

HARTFORD, Conn. (AP) — Shares of Itron Inc. rose Thursday as an analyst said the manufacturer of energy meters for utilities will be a key beneficiary of federal spending intended to modernize the nation's power grid.

Analyst Paul Clegg of Jefferies & Co. initiated a "Buy" rating of the Liberty Lake, Wash., company. He set a $77 price target.

Advanced meter infrastructure, or AMI, is fundamental to so-called "smart grid" construction projects that is expected to be propelled by federal stimulus spending, he said in a note to clients.

"As one of the few publicly traded smart grid plays, we view ITRI as a key holding," Clegg said. "We believe ITRI will benefit from significant growth as utility deployments accelerate next year."

AMI provides communications between utility meters and utility companies, improving the meters' operations and customer service.

Clegg estimates Itron's 2010 earnings will be $3.66 per share.

Wall Street's estimate of $3.20 per share is "fairly conservative" and will most likely increase over the next several months, he said.

Utilities this year put off spending on new meters and maintenance of basic meters as they waited to see how much stimulus money is approved by Congress, Clegg said. As a result, 2010 could be a much stronger year as utilities replace meters and spend on advanced meter infrastructure, he said.

Shares rose $2.55, or 4 percent, to $67.09 in afternoon trading.