What Happened?
Shares of water control and measure company Badger Meter (NYSE: BMI) jumped 3.5% in the morning session after Stifel lowered its price target on the stock to $208 from $224, though it maintained a Hold rating.
The analyst firm noted that Badger Meter was well-positioned to benefit from the move toward connected technology in the water utility sector. Despite this positive view of the business, Stifel justified its Hold rating by pointing out that the company's shares traded at a significant premium compared to historical averages and its peers. The stock's movement also occurred one day before Badger Meter was scheduled to release its third-quarter 2025 earnings results.
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What Is The Market Telling Us
Badger Meter’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 14.2% on the news that the company reported second-quarter earnings that fell short of Wall Street expectations. Badger Meter announced second-quarter earnings per share (EPS) of $1.17, which missed the average analyst estimate of $1.21 per share. While total sales for the quarter rose 10% year-over-year to $238.1 million, beating forecasts, the earnings miss appeared to weigh on investor sentiment., The company noted that while utility water sales increased by 11%, driven by demand for its smart water solutions and the recent SmartCover acquisition, sales of its flow instrumentation products were flat compared to the prior year. Additionally, operating profit margins saw a slight decrease from 19.2% to 18.8% year-over-year, and the company's tax rate increased.
Badger Meter is down 11.6% since the beginning of the year, and at $187.03 per share, it is trading 26.4% below its 52-week high of $254.17 from June 2025. Investors who bought $1,000 worth of Badger Meter’s shares 5 years ago would now be looking at an investment worth $2,471.
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