Graco (GGG) Q2 operating results were broadly "in line" with expectations after excluding a $9 million one-time tariff refund, while accelerating bookings and a larger backlog improved the company's near-term topline visibility, RBC Capital Markets said in a report emailed Friday.

Organic sales declined 1%, below the firm's estimate for 1.3% growth, as project timing and slower backlog conversion weighed on results, while organic bookings rose 5% during the quarter, "accelerated" to 14% over the six weeks and helped lift backlog 28% year to date, the report said.

Improving residential demand, healthy general industrial and maintenance activity, major data center and semiconductor project wins and continued new-product momentum point to stronger growth in H2. Graco also issued quarterly revenue guidance for the first time, reflecting better visibility from its order trends and backlog, according to the report.

The company reaffirmed its full-year organic sales forecast for low-single-digit growth, implying mid-single-digit growth in H2. The firm raised the company's 2026 and 2027 earnings estimates to $3.25 and $3.50 per share, respectively, according to the report.

RBC kept its outperform rating on Graco, and increased the price target to $96 from $92.

Price: 79.56, Change: +1.81, Percent Change: +2.33