Q2‘26 Preview: From Execution to Earnings Power

Research evidence excerpt

Q2‘26 Preview: From Execution to Earnings Power

Equity Research

17 July 2026

U.S. Machinery & Construction

Q2’26 Preview: From Execution to

Earnings Power

Q2 setup is balanced across beats, misses, and guide U.S. Machinery & Construction

changes. The sector remains investable as production, POSITIVE Unchanged

awards, pricing, and M&A support 2026 outlooks. We see U.S. Machinery & Construction

Adam Seiden, CFAupside to CAT, CMI, LECO, MLM, and J, while EPS risks are

elevated for ACM, PSN, AGCO, and HRI. +1adam.seiden@barclays.com212 526 2212

BCI, US

We see a balanced view of beats/raises, in-line/reaffirms, and miss/guide downs across our Vraj Patel

coverage of Machinery, E&C, and heavy materials companies in Q2 EPS season. After three +1 212 526 2773

months of stock-level underperformance which partially offset three months of stock-level vraj.patel1@barclays.com

outperformance, investor headspace is generally back to where it was at YE’25. Could BCI, US

machinery production grow in the following year? Could E&C award momentum continue Tyler Russell

despite higher rates and policy uncertainty? Could heavy materials companies mask uneven +1 212 526 7584

volumes and high costs with price and M&A? The answer to all is generally yes, we think, and tyler.russell@barclays.com

that keeps these stocks interesting through year-end and into 2026. BCI, US

Benjamin Falk

Our covered stocks don’t fit into neat buckets but if we had to decipher….There’s a handful +1 212 526 9497

of companies that we think have real earnings momentum (LECO, CMI, CAT). Another group that benjamin.falk@barclays.com

could have a respectable Q2 and/or FY’26 guide better than feared (MLM, J). There’s a group that BCI, US