Argan (NYSE:AGX) Downgraded to "Hold" Rating by Zacks Research

Key Points

• Zacks Research downgraded Argan from strong-buy to hold, though other analysts remain more positive and the stock still carries a consensus Moderate Buy rating with an average price target of $425.40.
• Argan reported better-than-expected quarterly earnings of $3.47 per share versus $1.99 expected, with revenue of $262.05 million, up 12.7% year over year.
• The company also authorized a $200 million share repurchase program, even as insiders sold shares during the quarter and institutional investors continue to hold a large stake in the company.

Argan (NYSE:AGX - Get Free Report) was downgraded by investment analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a research report issued to clients and investors on Tuesday,Zacks.com reports.

Other analysts have also issued research reports about the company. JPMorgan Chase & Co. upgraded Argan from a "neutral" rating to an "overweight" rating and set a $550.00 price target on the stock in a report on Friday, March 27th. Freedom Capital upgraded Argan to a "hold" rating in a research note on Tuesday, March 10th. Wall Street Zen upgraded Argan from a "hold" rating to a "buy" rating in a research note on Saturday, March 28th. Lake Street Capital increased their target price on Argan from $325.00 to $375.00 and gave the stock a "hold" rating in a research note on Friday, March 27th. Finally, The Goldman Sachs Group increased their target price on Argan from $399.00 to $518.00 and gave the stock a "buy" rating in a research note on Friday, March 27th. Four equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $425.40.

Argan Stock Performance

NYSE:AGX opened at $674.41 on Tuesday. The stock's fifty day moving average is $606.68 and its 200 day moving average is $452.72. Argan has a fifty-two week low of $193.82 and a fifty-two week high of $748.50. The firm has a market capitalization of $9.41 billion, a PE ratio of 69.24 and a beta of 0.61.

Argan (NYSE:AGX - Get Free Report) last released its quarterly earnings results on Thursday, March 26th. The construction company reported $3.47 earnings per share for the quarter, beating the consensus estimate of $1.99 by $1.48. Argan had a return on equity of 33.62% and a net margin of 14.59%.The company had revenue of $262.05 million for the quarter, compared to analyst estimates of $255.32 million. During the same quarter in the prior year, the firm posted $2.22 EPS. Argan's quarterly revenue was up 12.7% compared to the same quarter last year. Equities analysts forecast that Argan will post 11.44 EPS for the current year.

Argan announced that its board has authorized a stock repurchase plan on Wednesday, April 8th that permits the company to repurchase $200.00 million in shares. This repurchase authorization permits the construction company to repurchase up to 2.5% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company's board of directors believes its stock is undervalued.

Insider Activity at Argan

In other Argan news, Director John Ronald Jr. Jeffrey sold 4,556 shares of the stock in a transaction dated Tuesday, March 31st. The shares were sold at an average price of $539.85, for a total transaction of $2,459,556.60. Following the transaction, the director directly owned 3,636 shares in the company, valued at $1,962,894.60. This represents a 55.62% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Charles Edwin Iv Collins sold 11,068 shares of the business's stock in a transaction dated Tuesday, April 21st. The stock was sold at an average price of $621.61, for a total transaction of $6,879,979.48. Following the completion of the transaction, the chief executive officer owned 30,320 shares of the company's stock, valued at $18,847,215.20. This represents a 26.74% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 64,543 shares of company stock worth $39,054,956 over the last quarter. Corporate insiders own 6.69% of the company's stock.

Institutional Investors Weigh In On Argan

Institutional investors have recently added to or reduced their stakes in the business. Versor Investments LP purchased a new stake in shares of Argan in the third quarter valued at approximately $971,000. TD Asset Management Inc purchased a new stake in shares of Argan in the third quarter valued at approximately $35,629,000. M&T Bank Corp purchased a new stake in shares of Argan in the fourth quarter valued at approximately $478,000. Alpine Investment Management Ltd purchased a new stake in shares of Argan in the third quarter valued at approximately $16,203,000. Finally, Covenant Asset Management LLC purchased a new stake in shares of Argan in the fourth quarter valued at approximately $2,748,000. Institutional investors and hedge funds own 79.43% of the company's stock.

About Argan

Argan, Inc NYSE: AGX is a holding company that provides professional technical and management services to the power generation and renewable energy industries. Through its wholly owned subsidiaries, the company delivers engineering, procurement and construction management (EPCM), commissioning and operations and maintenance (O&M) services for a broad range of energy facilities. Argan focuses on projects for utility, industrial and municipally owned clients, helping to bring efficient thermal and renewable energy plants into operation and maintain optimal performance over the asset life cycle.

The company's principal subsidiaries include Gemma Power Systems, which specializes in turnkey construction of combined-cycle, simple-cycle, cogeneration and renewable energy plants; Atlantic Projects Company, which provides electrical balance-of-plant, control systems, instrumentation and commissioning services; and Infrastructure Solutions, which offers industrial maintenance, outage support and modification services.

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