RAL: Rebounds with Solid 1Q26 Beat & Raise

研报英文原文证据摘录

RAL: Rebounds with Solid 1Q26 Beat & Raise

,335.5

operating leverage along with new productivity enhancement program Prev. 2,160.8 2,271.9 EPS, cash Diluted 3.26 2.70 2.60 3.05

contributed to 270 bps EBITDA margin expansion. End market dynamics Prev. 2.30 2.65

were broadly positive, representing secularly growing Defense, Utility, P/CEPS 18.1x 21.9x 22.8x 19.4x

and electrification, complemented by short-cycle greenshoots. Overall, RevenueCal Q1 Q2 Q3 Q4

BTB was positive at 1.1x, including record Utility orders and 2-3 year + 2025 481.8A 503.3A 529.1A 554.6A

$1 bil Defense backlog. Organic sales and EBITDA margin guidance were 2026 534.6A 549.6E 553.1E 583.3E

also raised, mostly thanks to better-than-expected sequential momentum Prev. 510.8E 536.8E 542.9E 570.3E

in T&M, along with sustained growth in Defense (legacy munition 2027 556.0E 571.5E 589.6E 618.3E Prev. 532.4E 561.7E 571.4E 606.4E

replenishment in 2026 and new products for 2027/2028). FCF conversion EPS, cash Diluted

should still be +95%, with half of FCF being committed to buybacks, 2025 0.73A 0.67A 0.60A 0.70A

including a $100 mil (<2% of shares) ASR in 2Q26 and remaining $400 mil Prev. 0.69A

authorization (~6% of shares). We raise our 2026/2027 estimates to $2.60/ 2026 0.57A 0.60E 0.68E 0.76E Prev. 0.49E 0.52E 0.61E 0.67E

$3.05 and price target by $17 to $64. 2027 0.68E 0.68E 0.81E 0.88E

Prev. 0.55E 0.60E 0.70E 0.81E

Biggest surprise: Significant improvement in T&M margin, along with

upped cost-out targets. T&M EBITDA margins expanded 700 bps Y/Y to AllPricedvaluesas ofin priorUSD unlesstradingotherwiseday's marketnoted.close, EST (unless otherwise noted).

11.9% at strong 73% incrementals. Early productivity enhancement actions

led to upside savings, complemented by better operating leverage on HSD