Industrials/Multi-Industry: HVAC 2Q detailed preview: resi stabilized; applied is data center driven

Research evidence excerpt

Industrials/Multi-Industry: HVAC 2Q detailed preview: resi stabilized; applied is data center driven

Expectations for 2Q26 and CY26

Below we look at company commentary on expectations for 2Q26 and CY26.

Exhibit 1: OEM expectations for 2Q26 and 2026 vs BofA estimates

Expectations by product type

2Q25 sales outlook 2026

Residential Commercial Outlook

Resi:

- Expect resi down HSD

- down similar to 1Q which

Carrier Commercial:

was down mid-teens

- Guided up Mid-teens;

ramping in 2H

-Total company expected up

Johnson Controls -Total company expected up ~6%

~6%

- Expect resi +4%

Lennox

Commercial:

- Guided up +16%

- Expect resi sales up LSD

Madison Air

- Guided up HSD

SPX Technologies Total HVAC sales: +21.2 - 23.6%

- Flat for FY26 with stronger

2H, soft 1H mainly driven by

y/y comps

Trane - expect flat revenue in 2Q - +~10%

- Up 10% to LDD with

acceleration in 2H

Source: Company transcripts, Bloomberg, BofA estimates

BofA GLOBAL RESEARCH

Carrier

Given Carrier’s messaging intra-quarter we would expect Carrier to come in ahead of its

2Q HVAC guide and raise its FY resi guide. During investor meeting it seemed resi was

tracking ahead of the expectation for down mid-teens similar to 1Q and will likely come

in down HSD. Because it seems resi is performing better than expected, we think Carrier

will raise its resi guide from down HSD to down MSD.

Johnson Controls

We expect JCI to report 3QF26 earnings that come in ahead of both its guidance and our

estimates. Given commentary during the investor day it seems HVAC remains solid

driven by data centers, but Fire & Security might be starting to grow.

While a relatively new public company, we would expect Madison to come in ahead of

Street. We anticipate Madison will beat and raise similar to last quarter. However we