Itron, Inc. (ITRI), a technology devices provider to monitor energy and water usage, is entering into a partnership with Accell to further strengthen its market position in Latin America.
As part of the agreement, Accell will manufacture devices sold in Latin America and provide services and support for the products. Accell will also act as the lead regional distributor for Itron products designed and built outside of Latin America.
“Latin America is a very important and strategic region, and this agreement gives Itron and Accell the opportunity to maximize the market opportunity there,” said Mark de Vere White, senior VP of Customer & Market Experience at Itron. “It’s a win-win with Accell providing the regional focus and Itron providing the product portfolio to help Accell optimize the business model.”
The two companies expect the agreement to close by June 30. Upon the close, Accell will assume all prior Itron commitments in the region and will provide local support for products and customers. All of Itron’s Latin American facilities and employees will become wholly part of Accell, except for several Mexico-based employees.
Itron will assist with a transition over a period of months to ensure a smooth handoff of product training, customer relationships, and technical and product support.
Shares in Itron have recovered since hitting a low in March. However, the stock is still down some 18% on a year-to-date basis. The stock fell 1.9% to $68.34 in Wednesday’s morning trading.
Following a virtual meeting with Itron management last month, Oppenheimer analyst Noah Kaye assigned a Buy rating on the stock with a bullish $90 price target.
“Longer term, we expect COVID-19 will stimulate greater interest from utilities and cities in improving resiliency, with management indicating new use cases for the network emerging during the pandemic (e.g. constant power monitoring for high-risk customers),” Kaye wrote in a note to investors. “We see significant upside to FY20E consensus EPS, and view the shares as attractive at current levels.”
The rest of the Street is cautiously optimistic on Itron’s stock. The Moderate Buy analyst consensus is divided between 3 Buy ratings and 2 Hold ratings. The $78.50 average price target indicates shares have 15% upside potential in the coming 12 months. (See Itron stock analysis on TipRanks)
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