CECO Stock Slid 20% From Last Month’s Record High – Analyst Highlights A ‘Transformative’ Catalyst Which Could Spark A 58% Rally
Synopsis
JPMorgan initiated coverage of the stock with a ‘Buy’ rating, adding that Ceco’s acquisition of Thermon could nearly double its adjusted earnings before interest, tax, depreciation and amortization.
- The firm said Ceco’s exposure to AI-driven data center power demand and electrification makes it well positioned to deliver durable, multi-year growth.
- JPMorgan also highlighted Ceco’s $1 billion backlog and a pipeline exceeding $7 billion as key long-term growth prospects.
- After acquiring Thermon last month, Ceco raised its revenue and EBITDA outlook for the full year 2026.
Shares of Ceco Environmental Corp. (CECO) have slumped nearly 20% since hitting an all-time high last month, but a bullish Wall Street call suggests a recovery could be on the cards, driven primarily by the acquisition of the thermal solutions firm Thermon.
Since hitting a record high of $101.24 on June 10, CECO shares have ended in the red in 11 of the 18 preceding sessions. In fact, June marked CECO’s worst monthly performance since October 2024.
However, JPMorgan initiated coverage of the stock with an ‘Overweight’ rating and a price target of $130, implying an upside potential of roughly 58% from current levels.
JPMorgan Calls Ceco’s Thermon Acquisition ‘Transformative’
On Thursday, JPMorgan said Ceco’s acquisition of Thermon is set to be “transformative,” boosting recurring short-cycle revenue to roughly 40% of its business mix while nearly doubling its adjusted earnings before interest, tax, depreciation and amortization (EBITDA).
In June, Ceco completed its $2.2 billion acquisition of Thermon, a deal aimed at expanding its presence in markets such as energy transition, power generation, infrastructure, industrial reshoring, and decarbonization.
Ceco also raised its 2026 outlook following the buyout, forecasting revenue of $1.275 billion to $1.375 billion and adjusted EBITDA of $195 million to $225 million. Ceco posted revenue of $774.3 million and EBITDA of $90.3 million for FY2025.
CECO shares climbed 4% in pre-market trading on Thursday.
AI-Data Center Power Demand To Drive ‘Multi-Year Growth’
JPMorgan also highlighted Ceco’s $1 billion backlog and a pipeline exceeding $7 billion as key long-term growth prospects, adding that its exposure to AI-driven data center power demand, electrification, and U.S. reshoring makes it well positioned to deliver “durable, multi-year growth.”
Last December, CECO secured its largest-ever order, valued at more than $135 million, to deliver an emissions management system to a Texas natural gas power plant supporting data center expansion.
Meanwhile, retail sentiment on Stocktwits surrounding CECO has remained in the ‘bearish’ zone over the past 24 hours.
CECO stock has gained 33% so far this year, outperforming iShares U.S. Power Infrastructure ETF’s (POWR) 12% rise.
Also read: IONS Stock Heads Toward Biggest Single-Day Slump In Over 5 Years – Retail Calls It ‘Opportunity Of A Lifetime’
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