2Q26 Earnings Preview: Industry Update

Research evidence excerpt

2Q26 Earnings Preview: Industry Update

Deutsche Bank

Research

North America Industry Date

United States 29 June 2026

2Q26 Earnings

Industrials Industry Update

Multi-Industry, Electrical Preview

Equipment & Machinery

Recovery Reignited

Nicole DeBlase

The MI/EE group has outperformed the market since 1Q earnings on ME war de- Research Analyst

escalation and indications of improving demand +1-212-250-5916

YTD, the MI/EE group is now up 17% at the median, outperforming the S&P 500 by

7ppts. And since 1Q earnings season wrapped, the group has gained 3%, Andrew Krill, CFA

Research Analyst

outpacing the S&P 500 by 3ppts. We believe this can be attributed to de-escalation

+1-212-250-2997

of the Middle East conflict, coupled with a continuation of positive short-cycle

industrial data points (see our report on this theme here).The group now trades at Naim Kaplan

a NTM P/E multiple of 26x, still expensive vs. history on an absolute basis, and now Research Associate

also expensive vs. history on a relative basis - the 26x multiple represents a 25% +1-212-250-5332

premium to the S&P 500 vs. the 10Y median 0% premium and 5Y median 3% Jackson Glenn

premium. Thus, we cannot argue for further multiple expansion in the near term. Research Associate

+1-212-250-2500

We would characterize company commentary on demand as increasingly

optimistic, with April strength continuing into May/June

We caught up with nearly all companies we cover in the three weeks prior to

publishing this report, and many dispelled the notion that April strength was

attributable to pre-buy activity. During 1Q earnings season, several non-data center

companies' order growth surprised to the upside (e.g. AME, DOV, HON, MMM),

and others shared anecdotes/evidence of improving demand trends (e.g. ITW, PH).