11:52 AM EDT, 07/01/2024 (MT Newswires) -- APi Group ( APG ) is likely to see a growth inflection in H2 while Q2 earnings are expected to fall short of market estimates while revenue could top consensus, RBC Capital Markets said in a note.

The brokerage expects earnings of $0.46 per share on revenue of about $1.8 billion, compared with market expectations for $0.47 and $1.78 billion, respectively.

"APG should benefit from secular growth industries such as data centers, semiconductors, EV manufacturing, healthcare, and critical infrastructure, while the headwinds from customer/project selection should moderate," RBC analyst Ashish Sabadra said.

RBC said it is gaining confidence in H2 growth inflection on the back of high visibility, with its focus on secularly growing end-markets such as healthcare, data centers, and advanced manufacturing providing a cushion to any macro slowdown.

RBC projects full-year revenue at roughly $7.23 billion, versus market estimates for $7.22 billion, according to the note.

"We are expecting revenues to accelerate by by ~8% in 2H24 y/y driven by contribution from elevated, continued growth in services, and easier y/y comps as APG begins to lap the majority of the planned customer/project pruning, resulting in a smaller yet more profitable backlog in HVAC and specialty," the analyst said.

The brokerage has a sector perform rating and a $45 price target on the stock.

The company's shares were down about 2.6% in recent trading.

Price: 36.58, Change: -1.06, Percent Change: -2.80