1Q26 Earnings Wrap: Green Shoots No Longer; Moving to Broader Growth

Research evidence excerpt

1Q26 Earnings Wrap: Green Shoots No Longer; Moving to Broader Growth

USA | Industrials EquityMayResearch11, 2026

Exhibit 1 - Sequential Backlog Imporving;1Q26 Earnings Wrap: Green Shoots No Longer;

Reaching New Highs

110 70%

60%

90Moving to Broader Growth 80 50%

40% Sales 60 bn)in($

50 30%

40 Backlog

20% 30Earnings season was largely better than expected as top-line sales momentum 2010 10% NTM%

exceeded expectations with positive order trends providing confidence in . 0 4Q10 4Q11 4Q12 4Q13 4Q14 CAT4Q15 4Q16DE 4Q17 PCAR4Q18 4Q19OSK4Q20 4Q21TKR 4Q22 PH4Q23 1Q24TEX 2Q24 Backlog3Q24 %4Q24NTM 1Q25Sales 2Q25 3Q25 4Q25 1Q26 0%

upside to volumes as the year progresses. The breadth of growth has spread Source: FactSet, Jefferies

beyond just the secular themes that drove trends in 2024/2025, and we are in Exhibit 2 - YTD Share Performance Relative to

S&P 500the early stages of a broader industrial recovery, in our view. Earnings outlooks

VRT

CAT

WCC

TKR

AZZ

CMI

KMTwere modestly increased in what is normally a "maintain outlook" period. CARR

ETN

WSO

WAB

MSM

DE

GWW

GTES

TT

TEX

ROK

JCI

URI

LECO1Q Numbers Surprise to the Upside. EPS surprises skewed positive on better-than-expected

AGCO

MIDD

FAST

OSK

LIIrevenues (price, but also volume driven) and in-line to slightly higher margins (Ex. 3). Volumes saw MSAEMR

PCAR

ITW

FLS

PH

SITEbroadly improving trends across end markets, though the drivers remain data center related and IR

APH

HLMNHAYW

TEL

VLTO

XYLassociated with aerospace. HD Truck is expected to remain challenged into 2Q, before volumes

POOL

PNR

-60% -40% -20% 0% 20% 40% 60% 80% 100% 120%

Share Performance Relative to S&P 500 (YTD, % chg)improve ahead of a modest pre-buy later in 2H. Higher input costs and logistics costs are being .