JPMorgan Lowers Epam Systems' Price Target to $201, Maintains Overweight Rating

JPMorgan lowered Epam Systems' price target to $201 from $205 and maintained an Overweight rating. The firm expects IT services to experience below-average revenue growth for the third straight year, but believes growth will improve.

JPMorgan lowered its price target for EPAM Systems (NYSE:EPAM) to $201 from $205 while maintaining an Overweight rating. The firm expects the IT services sector to experience below-average revenue growth for the third consecutive year but anticipates an improvement in growth moving forward [2].

The downgrade follows a series of upgrades from other major financial institutions. TD Cowen, for instance, upgraded EPAM's stock rating to Buy and raised its price target to $205, citing the company's recovering growth trajectory and strong financial health [1]. Mizuho and Jefferies also increased their price targets for EPAM Systems, reflecting the company's robust performance and demand for its technical expertise [1].

EPAM Systems reported strong second-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $2.77 compared to the forecasted $2.61. The company's revenue also exceeded projections, reaching $1.353 billion against the anticipated $1.33 billion [1]. Despite these positive results, JPMorgan's outlook remains cautious, attributing the downgrade to the broader sector's subdued performance.

The IT services sector has been grappling with macroeconomic uncertainties, which have impacted sentiment and growth. However, EPAM Systems has shown resilience, with the firm noting that the company appears to have moved past operational disruptions caused by the Russia-Ukraine conflict [2]. EPAM's accelerating organic growth and active capital allocation strategy have been highlighted as supporting factors for its positive outlook [1].

JPMorgan expects revenue growth to reach high-single digits in 2026 as investor confidence rebuilds. The firm's models predict a return to gross margins in the low-30% range and around 13% annual EPS growth from 2026 to 2027 [2].

References:
[1] https://ca.investing.com/news/analyst-ratings/td-cowen-upgrades-epam-systems-stock-rating-to-buy-on-recovery-trajectory-93CH-4164003
[2] https://www.investing.com/news/stock-market-news/td-cowen-upgrades-epam-says-market-not-reflecting-margin-recovery-4198054