US Engineering & Construction: 2Q26 E&C Preview – E&C Growth Cycle Still Durable

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US Engineering & Construction: 2Q26 E&C Preview – E&C Growth Cycle Still Durable

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23 Jul 2026 04:00:00 ET │ 29 pages

US Engineering & Construction

2Q26 E&C Preview – E&C Growth Cycle Still Durable

CITI'S TAKE

Andrew Kaplowitz AC

While we expect 2Q26 commentary across E&C to remain broadly +1-212-816-0642

constructive given healthy end-market trends, we remain selective and andrew.kaplowitz@citi.com

prefer companies with the clearest exposure to visible capex cycles and

“self-help” potential. PWR and MTZ remain our preferred ideas, with strong Vladimir Bystricky

order/backlog momentum and potential positive EPS revisions supporting vladimir.bystricky@citi.com

further stock upside. We also like J (where we open a +ve CW) given its

exposure to fast growing advanced manufacturing and other durable Piyush Avasthy

infrastructure end markets that should lead to strong 2H26 piyush.avasthy@citi.com

backlog/revenue growth and margin expansion. While we sense some Jose Sulca Floresconcerns on data center capex (moderation/project bottlenecks), we believe

that structural growth-trends across AI/data centers remain intact and jose.alonso.sulcaflores@citi.com

continue to view increasing AI-adoption, load growth, electrification, and

industrial reshoring as durable drivers of multi-year investment activity,

supporting bookings across E&C end markets. “Self-help” through

disciplined/improving operational execution as well as strategic M&A and

share repurchases should augment EPS growth.

End market snapshot — We think fundamentals across E&C end-markets remain

constructive led by the AI/data center buildout, which we believe is driving a major

investment cycle in power generation, transmission & distribution upgrades,