Uncertainty in U.S. policies hits revenue prospects, Ameresco, Inc. Class A (AMRC.US) downgraded by Baird.

Baird has downgraded the rating of energy infrastructure company Ameresco, Inc. Class A (AMRC.US) from "outperforming the market" to "neutral," with a target price lowered from $25 to $13. While all key indicators in the company's fourth-quarter financial report exceeded market expectations, profit guidance was well below market expectations, leading to short-term pressure on the stock price. In contrast, Baird is more bullish on Itron, Inc. (ITRI.US). Baird analyst Ben Kallo stated that cost overruns had a negative impact on Ameresco, Inc. Class A's fourth-quarter gross margin, and management discussed issues with project suspensions due to uncertainty in the US federal government, with US federal government-related projects accounting for 20% of the company's total revenue in 2024. Despite Ameresco, Inc. Class A diversifying its backlog of orders and operating energy assets, this uncertainty may impact the stock. On the other hand, Baird has added Itron, Inc. to its new bullish list, stating that the predictability of its business is increasing as revenue shifts towards networks and outcomes, with the company also having a robust backlog of orders and a relatively stable base of utility customers. These factors enhance the company's ability to deliver better-than-expected performance even amid macroeconomic uncertainty. Baird continues to be optimistic about MP Materials (MP.US) and Bloom Energy (BE.US), considering them the best choices for alternative energy companies in 2025; with rare earths taking center stage in geopolitical conflicts, MP Materials seems to be a winner. Deals similar in scale and structure to American Electric Power Company, Inc. (AEP.US) could be a major catalyst for Bloom, and the rapid power supply theme remains attractive as several companies are seeking grid power supply while available supply is limited.