2Q26 preview: Looking for strong short cycle orders in 2Q

Research evidence excerpt

2Q26 preview: Looking for strong short cycle orders in 2Q

, our takeaway FY26 EPS

from our visit to Automate 2026 (see report) was that Industrial automation demand is Old New

broadening with no major pushbacks on price provide a supportive backdrop for ROK. In FPS $0.75 $0.74

FY27 EPSITT’s short cycle industrial businesses, orders improved in 4Q25, stepped up further in Old New

1Q26. At the BofA conference on May 12 (see report), ITT CEO described April as “equally FPS $1.28 $1.16

strong” with “no pre-buy” and “no inventory buildup.” For Forgent, we expect orders by Source: BofA Global Research estimates

neoclouds to grow faster relative to hyperscale or colocation demand. This should benefit BofA GLOBAL RES

companies that have added capacity and below-average lead times, such as Forgent. We

expect management to give initial FY27 revenue guidance supportive of upside to

consensus expectations. We recently initiated on INNIO (see report) following its February

IPO. We expect highlight of 2Q results to be equipment orders of $1.22bn, +122% y/y. This

should support upside to our FY estimates for revenue ($3.80bn) & adj. EBITDA ($0.72bn).

Data centers to remain strong and A&D solid

Data centers will remain a source of strength in 2Q, but we do not expect significant

incremental color with hyperscaler and neocloud companies earnings releases setting

the tone. During our visit to Datacloud Global Congress in June we heard that data

center infrastructure demand remains strong, with bottlenecks, construction delays, and

labor shortages not hurting orders or near-term earnings expectations. We expect A&D

to remain solid. During our conference in May ITT CEO, noted European defense

spending as a “big opportunity” but that there was more in the funnel currently with