NWPX Infrastructure From Pipe to Water Platform: Record Backlog, Precast Optionality: Initiating at Neutral with YE27 PT of $130

Research evidence excerpt

NWPX Infrastructure From Pipe to Water Platform: Record Backlog, Precast Optionality: Initiating at Neutral with YE27 PT of $130

Tomohiko Sano AC North America Equity Research

(1-212) 622-1099 10 June 2026 J P M O R G A N

tomohiko.sano@jpmorgan.com

Risks to Rating and Price Target

Lumpy Conversion of Public Infrastructure Poses Earnings Visibility Risk: The

water transmission industry is exposed to a highly unpredictable conversion rate of

public infrastructure spending, as capital is frequently bottlenecked by project delays

and design modifications. Any delays in completing major projects could have an

adverse impact on future expected earnings and profitability.

Data Center Demand Multiple Expansion: NWPX shares have re-rated higher as

NWPX has become increasingly associated with the secular data center buildout theme

as the need for substantial water cooling and transmission as well as underground

physical infrastructure all fall within their core competency. However, the degree to

which data center water infrastructure is a durable, scalable end market currently

remains unproven.

Raw Material Volatility and Fixed-Price Contract Exposure: NWPX depends on key

inputs of steel and concrete for its operations, and the associated prices can be volatile.

While the company is able to pass through input cost inflation with a premium through

its fixed-price contracts, it is susceptible to short-term margin volatility if prices were to

deviate materially (up or down) between the underwriting of the contract and the

procurement of materials, with NWPX being a beneficiary of lower prices and being

adversely impacted by higher.

M&A Strategy Presents Upside Optionality and Execution Risk: Our base case does