Argan strikes new all-time high after JPM upgrades as underappreciated AI play

[Natural gas fired turbine power plant,fall,field,CA]
Ron and Patty Thomas/E+ via Getty Images

Argan (NYSE:AGX [https://seekingalpha.com/symbol/AGX]) +13.6% in Monday's trading to an all-time high $294 after J.P. Morgan upgraded shares to Overweight from Neutral with a $315 price target, raised from $220, viewing the engineering and construction company focusing on alternative energy projects, and its Gemma Power Systems subsidiary, as underappreciated beneficiaries of the accelerating AI-driven power demand cycle.

JPM analyst Mark Strouse said he believe Argan's (NYSE:AGX [https://seekingalpha.com/symbol/AGX]) record backlog, a robust pipeline of large-scale gas projects in the U.S., and unprecedented pricing tailwinds in the broader gas turbine EPC market provide strong visibility into multi-year growth and margin expansion potential.

With management signaling "greater clarity and certainty" on upcoming project milestones and no signs of customer hesitation, Strouse said he sees a series of positive catalysts ahead as incremental awards are booked and backlog moves "significantly over $2 billion" by year-end.

"Supported by a strong balance sheet, disciplined capital returns, and a differentiated track record of execution, we believe AGX is uniquely positioned to capture the next leg of the AI infrastructure buildout and remains underappreciated as a pure-play levered to the generational
shift in U.S. power demand," Strouse wrote.

MORE ON ARGAN

* Argan Remains An Attractive Growth Play [https://seekingalpha.com/article/4827834-argan-attractive-growth-play]
* Argan: Opportunities Remain, Investors Should Not Stay On The Sidelines [https://seekingalpha.com/article/4827535-argan-opportunities-remain-investors-should-not-stay-on-the-sidelines]
* Argan: Solid Position To Capitalize On Power Generation Demand [https://seekingalpha.com/article/4824634-argan-solid-position-to-capitalize-on-power-generation-demand]