Raymond James Initiates Coverage of Badger Meter, Inc. (BMI) with Market Perform Rating

On Monday, analysts at Raymond James initiated coverage of Badger Meter, Inc. (NYSE:BMI) with a Market Perform rating for the stock.

Raymond James Initiates Coverage of Badger Meter, Inc. (BMI) with Market Perform Rating

An engineer overseeing the calibrations of a sophisticated flow meter.

The analysts expressed concerns over the company’s valuation, given its price-to-earnings ratio of 55.14 and shares trading at a near 52-week high, which suggests the stock might be trading at its peak.

They also noted the potential risks associated with the current market environment. Another vital consideration in their analysis of Badger Meter, Inc. (NYSE:BMI) was the anticipated reduction in U.S. federal stimulus to water utilities after 2026, which poses a substantial threat to industry-wide demand.

While the analysts expressed admiration for Badger Meter, Inc. (NYSE:BMI)’s business model and impressive financial health, they were cautious about recommending the stock, considering its current risk-reward balance.

Badger Meter, Inc. (NYSE:BMI) manufactures and markets products incorporating flow measurement, quality, control, and other system solutions. The company recently reported Q1 FY25 earnings that beat analysts’ expectations, which has helped its shares return nearly 10% over the past month.

While we acknowledge the potential of BMI to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BMI and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: ChatGPT Stock Advice: Top 12 Stock Recommendations and 10 Cheap Rising Stocks to Buy Right Now.

Disclosure: None.