Itron, Inc. (ITRI) Stock Forecasts

Summary

The Fed’s favorite inflation indicator, the PCE Price Index, will be released by the BEA this morning. The index differs from the better-known Consumer Price Index because its composition is changed more frequently and it is quicker to reflect the impact of real-time pricing. In the most-recent report, through March, PCE inflation was reported at 2.7% year over year; by comparison, the latest CPI report, through April, had inflation at 3.4%. Core PCE, which removes volatile food and energy prices, was 2.8% in the latest month. Our PCE forecasts call for 2.7% for both the headline number and for the core reading — roughly in line month to month as progress toward the Fed’s 2% goal gets harder as the target gets closer. Overall, inflation in this cycle peaked in summer 2022 and has been on a downward trek until plateauing recently. We track 20 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 2.6% rate year over year, up 30 basis points versus a month ago. The numbers are volatile and are distorted somewhat by ultra-low readings within the Producer Price Intermediate Goods category, which are falling at a 5% rate and may point to easing prices across the inflation spectrum in the months ahead. Focusing on core inflation — which we obtain by averaging Core CPI, market-based PCE Ex-Food & Energy (from the G