UK Industrials: 1H26F Results Previews

Research evidence excerpt

UK Industrials: 1H26F Results Previews

ion this year (hence any upside to near-term 5%

trading may be offset). Looking ahead to this forthcoming results, the 5 1H26F updates that -5%0%

-10%we are most comfortable with are from ESNT, HILS, IMI, LUCE & MGAM.

Coats Materials Weir Vesuvius Luceco PowerXP Elementis Bodycote Smith& Electronics Essentra IMI Spirax Rotork Magnesita Hill

TT Adv. RHIOur UK Industrials Stance: We continue to believe it is too early to get more constructive on

the cyclical names in our coverage (with the Middle East crisis still not over, it is too early to be . Morgan

'all in', although this could potentially be a 2027 trade). Near-term, we look for stocks with good Source: Jefferies Estimates

momentum (driven by end markets or self-help), earnings stability (upgrades would be nice),

M&A and/or buybacks, and we are also looking for valuation anomalies/mis-priced growth/

recovery. We also recognise there are stocks with improvement potential over the next 12-18m

in our coverage that we are constructive on, and could re-rate higher.

Our end market preferences are: civil aerospace, mining, semicon, US infrastructure & defence,

although we are warming to the outlook for oil & gas capex (again, this might be a 2027 trade).

This shapes our 'most preferred' list, which we update in this note (see below).

2H Weightings: Based on JEFe, there will again be a skew towards 2H this year with regard to

EBITA (it should be recognised that the sector is typically skewed, on average, to 2H), but we

note that only 4 companies have 2H weightings that are some way above the average for the

last 10 years (LUCE, VSVS, WEIR, XPP), and there are a number of companies with significant

EBITA yoy growth to deliver in 2H26F.