Badger Meter (BMI) posted an "underwhelming" Q1 operating miss amid unfavorable project timing and a slower book-and-ship business, RBC Capital Markets said in a note emailed Monday.

RBC noted that revenue dropped 9% year on year, which missed consensus estimates for 3% growth, while management decreased full-year organic outlook from below its long-term high single digit percent target to flat year on year, and Q2 is seen declining.

The phasing out of four large Advanced Metering Infrastructure, or AMI, deployments coincided with a backlog of nine projects that will not ship until the second half, which created a "revenue air pocket" in the first half that is masking long-term strength, the note said.

The investment firm said, however, that "seven of [the] nine large projects in backlog represent share gains, with customers moving from competitor products to Badger's cellular AMI."

RBC lowered its 2026 EPS estimate by $0.45 to $4.65. It kept its outperform rating on Badger Meter but cut the company's price target to $169 from $197.

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