Machinery Analysis: Trucks and short cycle Q2 preview: A nascent upcycle but with lingering questions

Research evidence excerpt

Machinery Analysis: Trucks and short cycle Q2 preview: A nascent upcycle but with lingering questions

Global Research

7 July 2026ab

Machinery Analysis Equities

AmericasTrucks and short cycle Q2 preview: A nascent

upcycle but with lingering questions Industrial, Diversified

Steven Fisher, CFA

Analyst

steven.fisher@ubs.com

Supply driven recovery in trucks gaining momentum; short cycle improving +1-212-713 8634

with puts/takes

Avinatan Jaroslawicz

Trucks should have a better Q2 than Q1, with an even stronger 2H outlook. Cl8 Analyst

truck orders have averaged 178% YOY growth in Q2, vs. 103% in Q1. We expect avinatan.jaroslawicz@ubs.com

CMI and PCAR to raise guidance. Strong power results should continue to support +1-212-713 1405

CMI. Judah Aronovitz

Short cycle looks mixed; we expect continued strong growth for KMT, with Associate Analyst

judah.aronovitz@ubs.com

possibly some volume upside near term and in 2027, but overall consensus

+1-212-713-4881

estimates for 2027 look full. ITW should have a better Q2 than Q1, but consensus

still looks a bit optimistic for both the Auto and Construction segments in Q2. Lauren Sullivan

Associate Analyst

We believe sentiment surrounding truck OEMs and cyclicals has improved compared to a lauren.sullivan@ubs.com

handful of quarters ago, however, there remains considerable hesitation regarding +1-212-713 8230

whether the truck cycle will gain significant momentum. Our channel checks suggest a

more optimistic outlook for 2026, bolstered by pre-buy activity, which bodes well for Q2

as well. Although freight volumes do not justify fleet expansion, freight rates have

rebounded due to tightened supply, enhancing carriers' profitability. On balance,

business conditions have strengthened, and we expect a strong quarter compared to

Q1.