GGG: 2Q26 Comments Ahead of the Call

研报英文原文证据摘录

GGG: 2Q26 Comments Ahead of the Call

Electrical Equipment & Multi-Industry

FLASH

FLASH: GRACO INC. (GGG) July 22, 2026

GGG: 2Q26 Comments Ahead of the Call Rating:

Peer PerformHeadline EPS of $0.91 compared to $0.81/$0.80 Street/WRe. We mark this as a Price:

$0.05 beat at the core EBIT line vs. our model, with the beat fully driven by better $73.88

Contractor margins that were ~350bps above our model. Excluding $9m of tariff Price Target:

NArefunds, this was an in line quarter vs. our model at the core EBIT line. Aggregate

segment margins of 31.3% were +180bps above our estimate (including a 150bps Source: FactSet, Wolfe Research

benefit from tariff refunds), while revenue was -1.8% below our estimate. Gross Priced as of 07/22/26

margins were +130bps Y/Y (vs. our estimate of +30bps Y/Y) driven by $9m of tariff

refunds. Free cash flow of $161m marked 107% conversion of adjusted net income

and compared to $92m WRe.

Organic growth of -1% was below our +1.4% estimate. At the consolidated

level, there was a 1pt headwind from the timing of finishing system sales and Brad Hewitt

other project activity in Industrial. Organic growth was in line with our model in bhewitt@wolferesearch.com (646) 582-9256

both Contractor and Expansion Markets, with the organic miss fully concentrated View GGG Model

in Industrial (-3% vs. +3% WRe). Margins came in +340bps above our model in

Nigel Coe, CPA; CFA

Contractor (30.4% vs. 27.0% WRe; would have been ~28.8% excluding tariff ncoe@wolferesearch.com

refunds), +30bps above our estimate in Industrial (33.8% vs. 33.5% WRe; would (646) 582-9259

View Nigel’s Researchhave been ~32.2% excluding tariff refunds), and -40bps below our model in

Expansion Markets (22.6% vs. 23.0% WRe). See Ex 1 for more details. Aidan Harmon

aharmon@wolferesearch.com