JPMorgan has downgraded EPAM Systems from Overweight to Neutral, citing delays from the company’s ongoing commercial reorganization in North America and a challenging industry backdrop for digital information technology services.
The bank set a new price target of $120, below the stock’s current level of $111.85, which values EPAM at approximately $5.77 billion. The downgrade follows a 20% rebound in the stock since an earnings-driven selloff, outpacing peer gains of 5% to 11% in the same period.
Guggenheim maintained its Buy rating but lowered its price target from $165 to $140, while William Blair downgraded EPAM from Outperform to Market Perform. Analysts at Guggenheim and William Blair pointed to a weaker full-year revenue outlook, driven by slowing growth in North America and limited prospects through 2026.
EPAM reported second-quarter fiscal 2026 results that exceeded analyst expectations, with non-GAAP earnings of $3.38 per share, up from $2.77 a year earlier, and revenue of $1.42 billion, a 4.5% increase. However, the company’s North American reorganization—focused on selling non-engineering skill sets—is expected to weigh on near-term growth rates and margins. JPMorgan noted that 13 analysts have revised earnings downward for the upcoming period and highlighted concerns over AI-related risks in the digital services sector.
Despite the recent stock recovery, EPAM remains down 45% year-to-date. The company’s reorganization and regional pressures continue to cloud its near-term outlook, even as it navigates a competitive digital services landscape.
