CROs: 2Q26 Earnings Preview: From Deep Skepticism to a Potential Inflection Point

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CROs: 2Q26 Earnings Preview: From Deep Skepticism to a Potential Inflection Point

Truist Securities

Equity Research Report July 15, 2026

HEALTHCARE: Contract Research

Organizations CROs: 2Q26 Earnings Preview: From

Deep Skepticism to a Potential Inflection

Jailendra Singh Point

212-401-4406 In this note, we discuss our updated views on the CRO sector, investor sentiment, and

Jailendra.Singh@truist.com

expectations heading into 2Q26 for our coverage. Our preview also includes historical

trends for key industry metrics.

Eduardo Ron

212-326-3152

Eduardo.Ron@truist.com Investor Sentiment for the Group Heading Into 2Q26. 1H26 was a volatile period for

CRO stocks, with the group trading down as much as 28% on a market-cap weighted

Payton Engdahl basis before closing 1H26 essentially flat (versus the S&P 500, up 10%), largely due

212-319-5476 to concerns around the potential impact of AI on the CRO business model. However,

Payton.Engdahl@truist.com stable-to-strong booking trends reported by most CROs in recent months have

helped alleviate fears of near-term demand disruption. While we agree that the

36 Page Document traditional CRO model will likely evolve as AI reduces reliance on manual and repetitive

tasks, adoption remains in its early stages and is currently characterized by broad

experimentation, elevated investment, and limited pricing impact. While current AI

Reasons for this report applications are primarily improving productivity and efficiency, and generating modest

margin improvements, the larger opportunity lies in AI-driven drug discovery, improved

✓ Earnings Preview development success rates, and an eventual increase in the number of clinical

candidates entering the clinic. For instance, the former CEO of a large CRO expert