Machinery/Waste Services: 2Q26 Preview: Guidance Update Season

Research evidence excerpt

Machinery/Waste Services: 2Q26 Preview: Guidance Update Season

the year; whether OSK revises lower its current 2H- indicator for our equity coverage universe.

weighted guidance remains to be seen, but we expect Street estimates to move It is an indicator our research analysts can

lower regardless; HRI’s current guidance embeds a notable acceleration in apply to a stock in their coverage into a

fleet utilization in 2H, and we expect them to reiterate the topline guide; we specific event in order to articulate near-

raised estimates for AGCO/CNH to reflect lower tariffs under the latest S232 term positivity or caution based on a spe-

directive; DE’s EOP commentary should be the next catalyst for these stocks. cific catalyst. As such, it can differ from the

• Taking MIDD off Positive Catalyst Watch: Recall, we placed Neutral-rated analysts' published ratings, which are rela-

MIDD on Positive Catalyst Watch in May ahead of the MFP (not covered) spin- tive to their coverage universe and six to

off slated for early July, arguing the SOTP valuation was higher than the 12 months in duration.

standalone price pre-spin (see details here). Our thesis has played out and we

are taking MIDD off Positive Catalyst Watch, updating the model to reflect the

MFP spin off, and introducing a Dec 26 PT of $151 based on ~13x FY1 EV/

EBITDA. We remain Neutral MIDD.

• Most debated: Following SUNB’s margin miss (see recap here) and EQPT’s

(not covered) guidance raise, investors remain divided about the margin

trajectory of URI/HRI; of the two, HRI’s easy 2Q25 comp should allow it to

leverage margins YoY while URI’s margins we expect to be modestly down

Contents

YoY; the overcapacity debate on CAT/CMI rages on; see our view in the recent

Agricultural Machinery: DE, CNH, AGCO 9