The Point for North America

Research evidence excerpt

The Point for North America

go right, particularly at these valuations. Yes, we expect the 2Q26 earnings calls to

focus on the usual suspects: patient volumes, hospital capex, macro-economic

challenges, as well as idiosyncratic company-specific headwinds, and while we

don’t think 2Q26 will assuage these concerns, it could create a holding pattern

from which to build. For the quarter, given the skittish trading environment, we

prefer higher-quality stocks that may be positioned for a catch-up trade, thus our

Top Picks are ABT, DXCM, and SYK, removing EW and ISRG. We are also opening a

Positive Catalyst Watch on GEHC and ISRG and a Negative Catalyst Watch on

HAE.

Joanne Wuensch

US Machinery - Digging Into a Better Construction Outlook

We have updated our proprietary construction starts-to-spending model ahead of

2Q26 earnings, based on May’26 starts and CPIP data. While we anticipate total

non-residential construction spending (buildings + non-buildings) to be flattish in

2026, we see building blocks for an acceleration in 2027 and sustained growth in

2028. This is supported by combined non-res buildings + non-buildings starts

that are up ~20% over the trailing-twelve-months (as of May’26), and up by a

similar amount YTD. We think this bodes well for our construction & access

equipment OEMs and rental names under coverage. URI stands out within our

rental coverage as we think the company can comfortably grow rental revenue by

HSD %’s in 2026-2028, helped by its outsized exposure to mega projects – we

forecast for mega project construction spending to increase ~34% in 2026, ~26%

in 2027, and ~17% in 2028. Click Below to Read the Full Report.

Kyle Menges

Citi’s Forecast for Non-Res Construction Estimated Market Outgrowth Stemming from

Spending Mega Projects