Badger Meter Inc. (BMI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Badger Meter reported record third-quarter 2014 earnings per share of $0.71, up 12.7% year over year driven by higher sales of municipal water and flow instrumentation products. Badger Meter will continue to benefit from the introduction of new products, acquisitions, lower cost pressure and sales mix improvement. In addition, continued strength in the municipal channel will also drive growth. However, the company is concerned that the fourth quarter will probably be a weak one due to higher debt, delivery delays, short-term increase in inventory and higher quality control costs. Further, a tepid macro economy along with the negative impact of foreign exchange rates may affect the company's performance. Thus, we are reaffirming our Neutral recommendation on Badger Meter with a target price of $58.

Overview:

Headquartered in Milwaukee, WI, Badger Meter Inc. provides liquid flow measurement products and control technologies serving water and gas utilities, municipalities and industrial customers worldwide. The company's products, which are developed both internally and in collaboration with other technology companies, are used in a wide variety of applications, including water, oil and chemicals. The company's product lines fall into three categories. They are as follows:

Municipal water: This is the largest category by sales volume. It involves sales of meters, and related technologies and services used by water utilities as the basis for generating water and wastewater revenues. The key market is North America, primarily the United States, as the meters are designed and manufactured to conform to standards promulgated by the American Water Works Association. Sales of water meters and related technologies and services are commonly categorized as residential or commercial water meter, the latter referring to larger sizes of meters.

Industrial flow: It includes products sold for other water-based purposes, including irrigation, water reclamation and industrial process applications. It also comprises meters and related technologies and services for measuring a wide variety of fluids in industries such as food and beverage, pharmaceutical production, petroleum, heating, ventilating and air conditioning (HVAC), measurement and dispensation of automotive fluids.


Specialty products: This category includes sales of radio technology to natural gas utilities for installation on their gas meters, valves and concrete vibrators.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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As of 12/26/2014, 04:15 PM


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