2Q26 Industrials Preview: Growth Broadening, But Expectations High

Research evidence excerpt

2Q26 Industrials Preview: Growth Broadening, But Expectations High

USA | Equipment Rental EquityJulyResearch19, 2026

KEY STOCKS FEATURED INCLUDE:2Q26 Industrials Preview: Growth Broadening,

TICKER RATING PRICE TARGETBut Expectations High

URI HOLD $1,000.00

Higher revenues, partially offset by higher costs should drive in-line to slightly KMT HOLD $38.00

better than expected earnings results as early year 'green shoots' have TKR HOLD $135.00

blossomed across more industrial end markets. Order and backlog growth WSO HOLD $415.00

should remain robust. We would highlight CAT, CMI, PH, APH, TEL and XYL VRT HOLD $320.00

in the more bullish camp, although extended valuations and strong sentiment

suggest the bar for strong stock reactions remains fairly high.

Where We Stand. The XLI has outperformed the S&P 500 by roughly 5 points year-to-date, though KEY CHANGES INCLUDE:

the path has been volatile. Early optimism around improving orders and industrial momentum was TICKER RATING PRICE TARGET

disrupted by the Iran conflict, but performance has regained traction over the past month as end

URI HOLD $1,000.00 ($940.00)

markets proved resilient despite macro uncertainty. Beneath the headlines, demand trends continue

to broaden across industrial markets, supported by secular growth drivers and improving short- KMT HOLD $38.00 ($47.50)

cycle fundamentals. The ISM remains in expansion territory, shipment trends are positive, industrial TKR HOLD $135.00 ($120.00)

production is improving, and management commentary points to better-than-expected volume WSO HOLD $415.00 ($430.00)

performance across most end markets, with agriculture the notable exception. VRT HOLD $320.00 ($340.00)

For 2Q, we expect stronger volumes, along with continued order and backlog growth, to support

results.