Overview
Wolfe Research has flagged a group of multi-industry companies it believes offer compelling risk-reward profiles as they work through differing market dynamics. The research note focuses on revenue momentum, order book trends, margin expansion potential and management guidance as the primary metrics to watch over the next several quarters.
Johnson Controls
Johnson Controls sits at the top of Wolfe Research's list, with the firm noting the company could outperform its first-quarter fiscal 2026 core growth target of roughly 3%. Management expects a roughly 300 basis point sequential decline in EBITDA margin consistent with typical seasonality. That decline, Wolfe notes, does not eliminate upside should management execute on productivity and process improvements that would boost margins.
The company is guiding to 55% incremental margin benefits that include lower amortization. Orders are projected to advance in the low to mid-single-digit range despite difficult year-over-year comparisons, while backlog growth is expected to remain in the high single-digit to low double-digit territory. Wolfe characterizes the company’s fiscal 2026 guidance of about $4.55 as conservative rather than a ceiling.
Johnson Controls also reported a fourth-quarter result that beat expectations, underpinned by 6% organic order growth. The note cites a separate analyst action, where Melius Research raised its rating on the company from Hold to Buy.
nVent Electric
Wolfe expects nVent Electric to post a notable revenue and earnings outperformance in the coming quarter, driven largely by Systems Protection organic sales growth of about 30%. The firm identifies orders as a key metric - forecasting a potential 30-40% increase - and anticipates a roughly 1 percentage point improvement in margins quarter-over-quarter to about a 21% core operating margin.
For fiscal 2026, management is expected to start with relatively conservative sales guidance in the high single-digit to low double-digit core sales growth range, while guiding to margin leverage in the 25-30% range. Wolfe notes this framing would align with consensus Street estimates of roughly $4.07, representing over 20% growth. The research highlights continued strength in liquid cooling and demand from data center and utility infrastructure as potential sources of further upside.
Recent company disclosures referenced by Wolfe include third-quarter results that beat expectations with 16% organic sales growth and a 65% surge in total orders. The company has also introduced a new line of modular liquid cooling solutions aimed at AI data centers.
Dover Corporation
Dover is described as showing resilient margin performance despite a tougher growth backdrop. Wolfe views the current quarter as a potential inflection point, with core growth that could accelerate into the 3-4% range as Retail Refrigeration markets return to growth and other cyclical businesses lap easier comparisons from prior periods. This momentum is expected to carry into 2026.
The firm lays out a scenario for Dover showing 4-6% core growth and incremental margins of 35-40%, as well as supplementary support from share repurchases. UBS has independently upgraded Dover from Neutral to Buy, according to the note, citing expectations for accelerating organic growth in 2026. Dover has also rolled out new products including an industrial CO2 refrigeration rack system and a retail media network for fuel dispensers.
Pentair
Wolfe views Pentair as appearing undervalued against improving organic sales across its portfolio. The research expects the Pool segment to deliver mid-single-digit growth in 2026, helped by announced price increases. Overall, the firm models 2-3% core sales growth combined with about $70 million in productivity initiatives as a pathway to roughly 10% earnings-per-share growth, consistent with Street expectations.
The company recently increased its dividend by 8%, marking its 50th consecutive year of dividend raises. Analyst sentiment noted in the note is mixed: Jefferies upgraded Pentair to Buy while Barclays and TD Cowen issued downgrades.
Vertiv Holdings
Vertiv is in the process of changing how it reports certain metrics, with this quarter identified as the last to provide quarterly orders growth and backlog disclosures in the same format. Wolfe observes that if orders hold steady on a sequential basis, year-over-year growth would accelerate to roughly 70% due to easier prior-year comparisons, with backlog near $10.2 billion.
Using that backlog figure, Wolfe outlines fiscal 2026 revenue guidance scenarios: revenue could exceed $13 billion with about $3 billion in EBITDA (roughly $5.85 in EPS), or potentially reach $14-14.5 billion in revenue with $3.3-3.4 billion in EBITDA (approximately $6.75 EPS).
Recent company activity includes Vertiv’s completion of a $1 billion acquisition of PurgeRite, a services provider for data center liquid cooling systems, and an announced 67% increase in its annual dividend.
What to watch
- Order trends and backlog across the group, which the note identifies as early indicators of revenue trajectory.
- Margin leverage and productivity initiatives, cited repeatedly as levers for EPS upside.
- Management guidance and how conservatively companies set expectations versus potential upside.
Wolfe Research’s compilation underscores order growth, backlog strength, and margin improvements as the primary drivers that could differentiate performance across these multi-industry names in the near term.