We are downgrading our recommendation on Badger Meter Inc. (BMI) to Underperform from Neutral as we anticipate it to perform well below the broader market.
Badger Meter’s vulnerability to macroeconomic conditions as well as delayed customer orders is adversely affecting its top-line growth. The company recorded a 16.6% year-over-year reduction in total revenues during the fourth quarter of 2009.
Moreover, intense competition from other well-established players, heavy dependence on key suppliers and exposure to foreign currency fluctuations undermine the company’s future growth prospects and profitability.Zacks Investment Research
