Investing.com -- The multi-industry sector presents compelling investment opportunities as companies navigate varying market conditions. Wolfe Research has identified several standout performers poised for growth in the coming quarters. Here’s a breakdown of the top contenders in this diverse sector.
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Johnson Controls leads the pack with potential to exceed its first-quarter fiscal 2026 target of approximately 3% core growth. While a 300 basis point quarter-over-quarter decline in EBITDA margin aligns with normal seasonality, there’s upside potential if management delivers on productivity and process improvements. The company projects 55% incremental margin guidance, which includes benefits from lower amortization. Orders are expected to increase in the low to mid-single digit range despite tough comparisons, with backlog continuing to show high single-digit to low double-digit growth. JCI’s fiscal 2026 guidance of approximately $4.55 appears to be a conservative estimate rather than a ceiling.
Johnson Controls reported better-than-expected fourth-quarter earnings and revenue, supported by 6% organic order growth. Additionally, Melius Research upgraded its rating on the company from Hold to Buy.
nVent Electric is positioned for a strong revenue and earnings beat this quarter, primarily driven by Systems Protection organic sales growth of approximately 30%. Key performance indicators to watch include orders (up 30-40%) and margins (increasing 1 percentage point quarter-over-quarter to approximately 21% core operating margin). For fiscal 2026, management is likely to start with relatively conservative sales guidance showing high single-digit to low double-digit core sales growth with margin leverage of 25-30%. This would align with Street estimates of approximately $4.07, representing over 20% growth. Continued strength in liquid cooling and data center/utility infrastructure could drive further upside.
In recent developments, nVent Electric reported strong third-quarter results that topped expectations, with 16% organic sales growth and a 65% surge in total orders. The company also unveiled a new line of modular liquid cooling solutions for AI data centers.
Dover Corporation has demonstrated strong margin performance despite challenging growth conditions. This quarter marks an important inflection point with core growth potentially accelerating to the 3-4% range as Retail Refrigeration markets return to growth and other cyclical businesses face easier comparisons. This momentum is expected to continue into 2026. The company shows potential for 4-6% core growth, incremental margins in the 35-40% range, and additional support from share buybacks.
Dover Corporation received an upgraded rating from UBS, which raised its view from Neutral to Buy, citing expectations for accelerating organic growth in 2026. The company also launched several new products, including an industrial CO2 refrigeration rack system and a retail media network for fuel dispensers.
Pentair appears undervalued despite showing improving organic sales growth across its portfolio. The Pool segment likely delivers mid-single-digit growth in 2026, supported by announced price increases. Overall, 2-3% core sales growth combined with $70 million in productivity initiatives provides a clear path toward meeting Street expectations of approximately 10% earnings per share growth.
Pentair announced an 8% dividend increase, marking its 50th consecutive year of raising its dividend. Analyst ratings on the company have been mixed, with Jefferies upgrading the stock to Buy while Barclays and TD Cowen both issued downgrades.
Vertiv Holdings is making changes to its reporting metrics, with this being the final quarter for quarterly orders growth and backlog disclosures. If orders remain steady quarter-over-quarter, year-over-year growth would accelerate to approximately 70% on easier prior-year comparisons, with backlog around $10.2 billion. Based on this backlog, fiscal 2026 revenue guidance could exceed $13 billion with approximately $3 billion in EBITDA (roughly $5.85 EPS), with potential to reach $14-14.5 billion in revenue and $3.3-3.4 billion in EBITDA (approximately $6.75 EPS).
Vertiv Holdings completed its $1 billion acquisition of PurgeRite, a provider of services for data center liquid cooling systems. The company also announced a 67% increase in its annual dividend.
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