Q2’26 Preview: Following 2H Volumes into 2027

Research evidence excerpt

Q2’26 Preview: Following 2H Volumes into 2027

Idea

July 15, 2026 11:08 AM GMT

Morgan Stanley & Co. LLCMMulti-Industry | North America Christopher Snyder, CFA

Equity Analyst

Q2’26 Preview: Following 2H Chris.Snyder@morganstanley.comBrandon Knutson +1 212 761-4470

Brandon.Knutson@morganstanley.com +1 212 761-4168

Volumes into 2027 Toby Okwara

Toby.Okwara@morganstanley.com +1 212 761-1693

Note includes detailed write-ups and modeling on company- Christine Yao

specific set-ups into Q2 EPS along with key macro debates. We ResearchChristine.Yao@morganstanley.comAssociate +1 212 761-4193

connected with nearly all of our Corporates in June.

Multi-Industry

Exhibit 1: US multi-industry median operating profit growth: Chart highlights the North America

Industry View Attractive

conservative Q2 bar against an easy comp, but the bar gets more difficult into 2H.

We think this will lead to bifurcating 2H revisions & thus equity performance –

with US Industrials trading at historically high multiples, the equities need

revisions to drive further upside

Source: Morgan Stanley, Visible Alpha

We continue to call for broad Q2 beats with Corps providing conservative

quarterly guides into improving macro data (link) – but the market is now fully on

board with this call, bidding US Industrials to a 2 SDEV premium vs history, which

complicates the set-ups as revisions are now both anticipated by the market &

required to drive further equity upside. For this reason, we view 2H guides as the

KPI this EPS season. While a rising cyclical tide + potential channel build will lift all

US Industrial equities above Q2 guidance, the bar gets tougher into 2H, and we see

bifurcating volumes on channel dynamics – this is what drives our stock selection.