Q2 Preview: Looking for Short-Cycle Green Shoots, Defense Strength Durable

研报英文原文证据摘录

Q2 Preview: Looking for Short-Cycle Green Shoots, Defense Strength Durable

argest growth and margin

driver, with our 2Q estimate of $819MM in sales, up 6.2% y/y, and adjusted margin of 23.5%, up Exhibit 1 - Trading at 19.0X FY2 EV/EBITDA,

46% Prem to Mkt vs. Historical Avg Prem of

200 bps y/y. The business should benefit from defense/space infrared, FLIR, semiconductor wafer 22%

25x 50%inspection and improving industrial vision. We would frame margin upside as more volume-driven 45%

than mix-driven. (x) 20x 40%35% (%)

Multiple 15x 30% S&P

10x 20%

15%Defense and Marine Provide Visibility, But Timing Matters. Defense remains a durable floor across EV/EBITDA 25% to

5x 10% PremiumFLIR, space sensors, A&D Electronics, marine and unmanned systems. A&D Electronics grew 14.4% FY2 5%

in 1Q on demand for lasers, radars, microwave devices and related defense electronics. The key 0x 0% Jun-23 Aug-23 Oct-23 Dec-23 Feb-24 Apr-24 Jun-24 Aug-24 Oct-24 Dec-24 Feb-25 Apr-25 Jun-25 Aug-25 Oct-25 Dec-25 Feb-26 Apr-26 Jun-26

watch item is whether defense orders and backlog conversion translate into outlays, particularly as TDY FY2 EV/EBITDA 3 Yr Avg. EV/EBITDA % vs. S&P 3 Yr Avg. % vs. S&P

.

investor confidence in the 2H ramp depends on execution. Source: FactSet, Jefferies estimates

Margins — Sequential Improvement, But Mix Still Important. We model 2Q adjusted segment

margin of 24.2% and adjusted EBIT margin of 22.9%, each up 70 bps y/y. T&M should

improve sequentially after an anomalous 1Q, which should help contribution margins, though

Instrumentation margins are still likely down y/y. DI should be better on volume, while Engineered

Systems and Aero appear more sequentially stable.

What to Do From Here. We remain constructive on TDY, with the 2Q print likely confirming a gradual