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On Monday, RBC Capital Markets analyst Jeffrey Reive increased the price target for Badger Meter (NYSE:BMI) shares to $252 from the previous target of $238, while maintaining an Outperform rating on the company. Currently trading at $201 with a market capitalization of $5.9 billion, InvestingPro analysis suggests the stock is trading above its Fair Value. This adjustment follows Badger Meter’s impressive first-quarter performance in 2025, which exceeded expectations with strong demand for its metering products and favorable product mix contributing to significant earnings growth.
Badger Meter, a company specializing in water metering technology, reported a robust 25% beat in its first-quarter 2025 operating earnings compared to RBC Capital Markets’ estimates and consensus figures. The company’s earnings per share (EPS) saw a notable year-over-year increase of 31%, contributing to its impressive 15.1% revenue growth over the last twelve months. Although the overall revenue was largely in line with forecasts, organic demand for water metering products showed a particularly strong performance, rising by 12%, which surpassed the estimated 9% increase. According to InvestingPro, the company maintains a "GREAT" financial health score of 3.32, reflecting its strong operational performance.
The company’s gross margin expanded by 360 basis points to reach 40.76%, a move largely attributed to a favorable mix of customers and products. Smaller utilities and software products were key contributors to this improvement. Additionally, Badger Meter has developed a strategy to manage tariffs effectively, planning to counteract cost increases with pricing adjustments, albeit with some expected delay. InvestingPro data reveals that the company has maintained dividend payments for 55 consecutive years, with 32 years of consecutive increases, demonstrating strong financial management.
Badger Meter also confirmed that its manufacturing facility in Mexico is exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA), which provides an added layer of cost certainty for the company. The positive quarterly report, along with the tariff exemption, appears to have contributed to a significant 10% surge in the company’s stock price, which was also likely influenced by some short covering activity.
Investors and market watchers will continue to monitor Badger Meter’s performance as the company navigates the dynamic market landscape, balancing tariff impacts, and demand for its metering solutions. The raised price target from RBC Capital Markets reflects confidence in the company’s ability to maintain its growth trajectory and manage external challenges effectively.
In other recent news, Badger Meter reported first-quarter 2025 earnings that exceeded analysts’ expectations, with earnings per share reaching $1.30, surpassing the projected $1.07. The company’s revenue also slightly exceeded forecasts, coming in at $222.2 million against an anticipated $220.92 million. This strong performance was attributed to a 13% year-over-year sales increase and a notable 16% growth in their utility water product line. Operating profit margins hit a record 22.2%, a 360 basis point improvement from the previous year, highlighting the company’s operational efficiency. Additionally, Badger Meter completed the acquisition of SmartCover, which contributed to a 25% increase in software revenue. In another development, Stifel analysts raised their price target for Badger Meter from $196 to $200, maintaining a Hold rating, reflecting a positive yet cautious outlook. The analysts highlighted the company’s resilience against economic pressures, such as tariffs, and noted that Badger Meter’s strategic positioning remains strong. These recent developments underscore the company’s robust market position and its ability to navigate potential challenges effectively.
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