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Investing.com - JPMorgan initiated coverage on Argan (NYSE:AGX) with a Neutral rating and a $220 price target for December 2026. The company, which has delivered an impressive 176% return over the past year, currently maintains a strong financial position with more cash than debt on its balance sheet.
The investment bank views Argan, through its Gemma (EGX:ECAP) subsidiary, as a leading provider of engineering, procurement, and construction (EPC) services for large-scale gas and alternative fuel power plants.
JPMorgan expects Argan to benefit from increasing U.S. energy loads and a forecasted multi-year gas power plant construction cycle, with most growth coming from gas power plant construction.
The firm notes that Argan has significant exposure to solar-plus-storage EPC and industrial construction, providing some end-market diversification beyond its core gas plant business.
While JPMorgan considers the stock fairly valued compared to EPC peers, it observes that Argan has traded volatilely within the AI data center theme despite growing visibility into future years, and might take a more positive stance following a significant price pullback.
In other recent news, Argan Inc. reported impressive financial results for the first quarter of fiscal year 2026, surpassing both earnings and revenue expectations. The company achieved earnings per share (EPS) of $1.60, significantly exceeding the projected $0.90, and generated $193.7 million in revenue, which was higher than the anticipated $175.8 million. Argan’s Power Industry Services segment played a crucial role, with its revenue increasing by 45%. Additionally, the company maintains a strong cash position with $546.5 million and no debt. In another development, Argan’s Board of Directors declared a quarterly dividend of $0.375 per share, marking a 50% increase over the past two years. Analyst firms have noted Argan’s robust financial health and project pipeline, with expectations to exceed $2 billion in backlog within the next six months. The company’s strategic focus on power and renewable energy projects positions it well to capitalize on growing market demand.
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