SMid Cap Industrials: 2Q Preview: Charged and Automated: Favoring Automation & Power, Cautious on Building Products

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SMid Cap Industrials: 2Q Preview: Charged and Automated: Favoring Automation & Power, Cautious on Building Products

J P M O R G A N North America Equity Research

13 July 2026

SMid Cap Industrials

2Q Preview: Charged and Automated: Favoring

Automation & Power, Cautious on Building Products

SMid Cap Industrials represents a compelling space for investors, offering North America Small and Mid Cap

exposure to secular megatrends like AI, safety, automation, electrification, and Industrials

infrastructure renewal. The sector is undergoing a cultural and strategic Tomohiko Sano AC

transformation, with companies emphasizing capital discipline, operational (1-212) 622-1099

excellence, and management renewal to drive margin resilience and long-term tomohiko.sano@jpmorgan.com

value. For 2Q26, we are favoring Automation and Power Infrastructure while we Brendan Shea, CFA

have a cautious view on Building Products for the quarter. Our top picks into results (1-212) 622-0770

are HLIO, MATX, and POWL, while we recommend avoiding ALLE and AOS brendan.shea@jpmorgan.com

reflecting our view on the Building Products sub-sector. Global Capital Goods Ethan Coyle

(1-212) 270-0613

Webinar Monday, July 13, at 9:00AM ET / 14:00 UK (sign up here). ethan.coyle@jpmchase.com

• Automation: Leads on Secular Growth and Order Momentum: J.P. Morgan Securities LLC

Automation stands at the top of our sector preferences, supported by improving

end markets, long-term secular growth, accelerating order volumes, and The authors wish to thank Rakshit Jain,

relatively conservative broad-based guidance across multiple end markets. of the J.P. Morgan Global Research

HLIO is our top pick, reflecting robust order growth, new product momentum, Center, for contributions to this report.