EPAM Shares Drop 3.7% After JPMorgan Downgrade

EPAM Shares Drop 3.7% After JPMorgan Downgrade

EPAM Systems Inc (NYSE:EPAM) shares declined 3.7% on Wednesday after JPMorgan downgraded the stock to Neutral from Overweight and set a new price target of $120.00. JPMorgan analyst Puneet Jain cited the company’s ongoing commercial reorganization in North America, specifically the effort to sell non‑engineering skill‑sets, as a key concern, noting that any returns from this initiative are likely to materialise only over a longer horizon.

Jain described EPAM as a best‑in‑class engineering firm within the sector but warned that the transition could weigh on near‑term growth rates and margin trajectory, especially given the challenging industry backdrop for Digital IT Services. He stated that the stock is unlikely to outperform peers meaningfully until growth trends inflect. The analyst highlighted several factors limiting near‑term relative outperformance: the time required for management to rebuild a track record with investors, the absence of a near‑term catalyst to offset AI‑related risks, and the fact that EPAM’s stock has already gained about 20% since its earnings‑driven sell‑off, whereas peers have risen only 5‑11% over the same period.

Despite these headwinds, Jain expressed confidence in CEO Balazs Fejes’s ability to deliver the long‑term strategic pivot toward AI‑based services.