Beyond the Stimulus Story: Why the AMI Replacement Cycle Has Years of Runway

Research evidence excerpt

Beyond the Stimulus Story: Why the AMI Replacement Cycle Has Years of Runway

USA | Multi-Industrials EquityJuneResearch17, 2026

KEY STOCKS FEATURED INCLUDE:Beyond the Stimulus Story: Why the AMI

TICKER RATING PRICE TARGETReplacement Cycle Has Years of Runway

BMI BUY $165.00

Water meter stocks have de-rated as the recent slowdown has put the HSD

growth algo under suspicion. We forecast HSD organic growth over the

next several years, supported by multi-layered replacement cycles, mix-driven

KEY CHANGES INCLUDE:

pricing, and software, with funding mechanisms largely independent of federal

programs. The current moderation reflects project timing and normalization TICKER RATING PRICE TARGET

from elevated activity, not a structural change in demand. BMI BUY $165.00 ($150.00)

Why This Debate Matters Now. The bear case argues 2022–2024 was a stimulus-driven cycle

pulled forward by federal funding, leaving a hangover ahead. We acknowledge 2022–2024 was Exhibit 1 - BMI share price has declined

significantly over the past year, given concernelevated by one-time factors that should not repeat: backlog release, supply chain normalization, that the growth slowdown is structural rather

federal funding pull-forward, and pricing, on top of an accelerating AMI cycle. The question from than an air pocket, but we see this as an

here is whether the structural AMI cycle alone can carry HSD as one-time tailwinds fade, and in our attractive entry point as the LT HSD growth

algorithm remains supported

view it remains well-supported. Our forecast is broadly in line with consensus on HSD outer-year 280

growth; the gap is with the buyside, which is not yet underwriting that path. 260240

$ 220

Price 200180Structural Case for HSD Growth. The conversion runway extends beyond standard penetration