North America Life Science Tools & Diagnostics: 2Q26 Preview: Optimism Once Again for Gradual (Glacial?) Recovery to Arrive

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North America Life Science Tools & Diagnostics: 2Q26 Preview: Optimism Once Again for Gradual (Glacial?) Recovery to Arrive

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08 Jul 2026 05:30:32 ET │ 79 pages

North America Life Science Tools &

Diagnostics

2Q26 Preview: Optimism Once Again for Gradual (Glacial?) Recovery to

Arrive Patrick Donnelly AC +1-212-816-0701

patrick.b.donnelly@citi.com

CITI'S TAKE

Brendan Digan

From our conversations, investor appetite appears to be slowly returning +1-212-816-8742

across our coverage after an underwhelming 1Q and concerns of AI brendan.digan@citi.com

disruption, with cautious optimism for the elusive end-market recovery to

materialize. To help understand 2H dynamics, we conducted a proprietary Albert Hu

survey with Citi’s Research Innovation Lab regarding ordering patterns and +1-212-816-2277

expectations, with a focus on instrumentation ahead of reshoring timelines albert.hu@citi.com

and bioprocessing trends. Sentiment on AI for Tools is gradually turning

positive, with the view that AI could accelerate drug development and Nicole Dragotta

support re-investments into R&D pipelines. CRO interest remains on the +1-212-816-9342

lighter side with AI overhangs persisting despite sustained higher biotech nicole.dragotta@citi.com

funding. Heading into 2H, we reiterate WAT/WST as our top Life Science

picks, GH our top Diagnostic pick, and CRL our top CRO pick (adding upside

90-day CRL Catalyst Watch).

Top Picks — Our top picks heading into 2H26 include WAT and WST in Life Sciences,

GH in Specialty Dx, and CRL among the CROs. For WAT, strength of the base

business should continue, due to idiosyncratic drivers and the instrument

replacement cycle, and BD execution should remain strong, driving earnings upside,

in our view.