US Industrials: 2Q Preview: Data Center Still In Focus; Broadening In Sight

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US Industrials: 2Q Preview: Data Center Still In Focus; Broadening In Sight

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13 Jul 2026 04:02:16 ET │ 57 pages

US Industrials

2Q Preview: Data Center Still In Focus; Broadening In Sight

CITI'S TAKE

Andrew Kaplowitz AC

Still favorable secular trends led by AI/data center related demand tailwinds +1-212-816-0642

coupled with signs of broadening short-cycle recovery we think are andrew.kaplowitz@citi.com

supportive of expectations for relatively solid 2Q earnings results that we

think should remain aligned with our outlook for overall accelerating ’26 Vladimir Bystricky

organic growth and supportive of largely constructive 2H outlooks reflecting +1-212-816-6595

still positive EPS growth momentum. With most Multis stocks back below vladimir.bystricky@citi.com

recent highs, we view a recent pullback in the sector as presenting more

favorable entry points for our favored names; Top Picks into 2Q earnings Piyush Avasthy

include PH, ETN, VRT, EMR, TT, DOV and ROK. We also open a positive +1-212-816-9159

Catalyst Watch on ITW. piyush.avasthy@citi.com

Jose Sulca Flores

Organic Growth & Op Margin — Overall, we model 2Q26 sector average organic

+1-212-816-1717growth of +4.0% led by continued data center related tailwinds, but also with

broadening short-cycle recovery contributing. Sector average profitability we think jose.alonso.sulcaflores@citi.com

could remain solid despite some ongoing commodities/input cost and tariff

volatility given what we view as improved and more pro-active price management

amongst most of our covered companies; we model sector average operating margin

of 21.2%.

Top Picks Ahead of Earnings — Multis Top Picks ahead of 2Q earnings we think have

relatively good visibility to N-T results and sustainable topline/earnings momentum