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JP Morgan Initiates Coverage on Argan Neutral with PT $220.
ByAinvest
Monday, Jul 21, 2025 6:01 am ET1min read
JP Morgan Initiates Coverage on Argan Neutral with PT $220.
In a significant move, JP Morgan initiated coverage on Argan Inc. (NYSE: AGX) with a Neutral rating and set a December 2026 price target of $220.00. This comes amidst strong financial performance and a robust project pipeline for the engineering, procurement, and construction (EPC) services provider [1].Argan, through its Gemma subsidiary (EGX: ECAP), is a leading provider of EPC services for large-scale gas and alternative fuel power plants. The investment bank highlights Argan's solid financial position, with a strong balance sheet showing more cash than debt and revenue growth of 45% in the last twelve months [1].
JP Morgan expects Argan to benefit from increasing U.S. energy loads and a forecasted multi-year buildout of gas power plants. The majority of the company’s growth is anticipated to come from gas power plant construction. Additionally, Argan maintains material exposure to solar-plus-storage EPC and industrial construction, providing diversification across end markets [1].
While the stock is considered fairly valued compared to EPC peers, JPMorgan acknowledges that Argan has experienced volatile trading within the AI data center theme. The firm could take a more constructive view following a significant pullback [1].
Recent financial results for Argan Inc. for Q1 FY2026 were impressive. The company reported earnings per share (EPS) of $1.60, which exceeded the expected $0.90, and generated $193.7 million in revenue, surpassing the forecasted $175.8 million. This represents a 23% increase in revenue year-over-year, with a significant contribution from the Power Industry Services segment. The company also declared a quarterly cash dividend of $0.375 per share, marking a 50% increase over the past two years [1].
Argan’s project backlog stands at a record $1.9 billion, with expectations to exceed $2 billion in the coming months. The company continues to maintain a strong cash position with no debt, reflecting its robust financial health [1].
References:
[1] https://www.investing.com/news/analyst-ratings/argan-stock-initiated-with-neutral-rating-at-jpmorgan-on-power-plant-growth-93CH-4143046
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