Industry Pulse: 2Q26 A&D Distributor, MRO, and Manufacturer Survey

Research evidence excerpt

Industry Pulse: 2Q26 A&D Distributor, MRO, and Manufacturer Survey

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Citi Research Equity Ratings Distribution

12 Month Rating Catalyst Watch

Data current as of 01 Jul 2026 Buy Hold Sell Buy Hold Sell

Citi Research Global Fundamental Coverage (Neutral=Hold) 61% 32% 7% 36% 48% 16%

% of companies in each rating category that are investment banking clients 38% 42% 27% 42% 37% 36%

Guide to Citi Research Fundamental Research Investment Ratings:

Citi Research stock recommendations include an investment rating and an optional risk rating to highlight high risk stocks.

Risk rating takes into account both price volatility and fundamental criteria. Stocks will either have no risk rating or a High risk rating assigned.

Investment Ratings: Citi Research investment ratings are Buy, Neutral and Sell. Our ratings are a function of analyst expectations of expected total return

("ETR") and risk. ETR is the sum of the forecast price appreciation (or depreciation) plus the dividend yield for a stock within the next 12 months. The

target price is based on a 12 month time horizon. The Investment rating definitions are: Buy (1) ETR of 15% or more or 25% or more for High risk stocks; and

Sell (3) for negative ETR. Any covered stock not assigned a Buy or a Sell is a Neutral (2). For stocks rated Neutral (2), if an analyst believes that there are

insufficient valuation drivers and/or investment catalysts to derive a positive or negative investment view, they may elect with the approval of Citi

Research management not to assign a target price and, thus, not derive an ETR. Citi Research may suspend its rating and target price and assign “Rating

Suspended” status for regulatory and/or internal policy reasons. Citi Research may also suspend its rating and target price and assign "Under Review"