TIH: Announces ~$1B in Power Systems orders + AVL capacity expansion plans to support growing demand

Research evidence excerpt

TIH: Announces ~$1B in Power Systems orders + AVL capacity expansion plans to support growing demand

EQUITY RESEARCH QUICK TAKE

RBC Dominion Securities Inc.

Sabahat Khan (Analyst)

Arthur Nagorny, CFA (Analyst)

Bhaven Shah (AVP)

Padraig Murphy (Associate)

June 17, 2026

Toromont Industries Ltd.

Announces ~$1B in Power Systems orders + AVL capacity expansion plans to support

growing demand

TSX: TIH | CAD 205.71 | Outperform | Price Target CAD 234.00

Sentiment: Positive

What happened – Toromont announced today that its Power Systems business has received confirmation of firm orders for ~$1

billion (delivery "substantially" in 2027). The company noted that the orders are expected to require incremental capacity beyond

2026 levels. To support this anticipated demand, Toromont is evaluating additional efficiencies at existing facilities (we read this as

capacity expansions at the initial Hamilton facility and the new North Carolina facility), and acquiring land for a new (3rd) facility

in Hamilton, Ontario.

Our thoughts – Overall, we believe the magnitude of these orders is a notable positive for the medium- to long-term outlook of the

power systems business (including the AVL platform). We have had many discussions with investors over the recent weeks on TIH

and potential drivers of upside from here (given the strong share price and valuation run-up). Continued strong revenue/earnings

growth at AVL and announcements of capacity expansions for this business (both of which were reflected in the release today)

were identified as likely catalysts from current levels (noting stock trades at 28.6x our 2027 EPS). Overall, today's announcement

is likely to be received well given the magnitude of the power systems orders ($1 billion, with AVL likely accounting for a large