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David Raso

Senior Managing Director and Partner at Evercore ISI

David Raso is a Senior Managing Director and Partner at Evercore ISI, where he leads the Industrials and Machinery Research Team and is renowned for his deep expertise in machinery, engineering, and construction sectors. He covers specific companies such as Deere & Company, Caterpillar, Illinois Tool Works, Parker-Hannifin, PACCAR, and Timken, maintaining a dominant performance record having been ranked the No. 1 machinery analyst in the Institutional Investor/Extel equity research poll for 24 consecutive years, and inducted into the All-America Research Team Hall of Fame in 2011. Raso began his career at Citigroup as a Managing Director covering industrial machinery before joining ISI in 2008, and holds a BA in economics from Wesleyan University and an MBA in finance and accounting from NYU Stern. His professional credentials include extensive experience in equity research and industry accolades, reflecting his leadership and consistency as one of Wall Street’s most recognized industrial analysts.

David Raso's questions to PACCAR (PCAR) leadership

David Raso's questions to PACCAR (PCAR) leadership • Q3 2025

Question

David Raso inquired about the underlying factors supporting PACCAR's North American growth outlook, including bonus depreciation and customer sentiment, and the timing for orders to reflect 2026 growth. He also asked about the EPA's NOx standard deadline for 2027 and the geographical cadence of Q4 deliveries.

Answer

CFO Brice Poplawski noted expected growth from tariffs and pricing competitiveness, with bonus depreciation incentives spurring Q4 demand. CEO R. Preston Feight added that customer sentiment is mixed but a growing sense of momentum exists due to the impending 35 mg NOx standard and tariff clarity. Feight stated PACCAR is prepared for the 35 mg NOx standard, emphasizing that the law stands until changed, and acknowledged the burden on the supply base if changes occur. For Q4 deliveries, Feight indicated a shift towards European volume due to North American holidays.

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David Raso's questions to PACCAR (PCAR) leadership • Q3 2025

Question

David Raso asked about the underlying factors for PACCAR's North American growth outlook, specifically customer feedback on bonus depreciation orders and the timing for orders to reflect 2026 growth. He also questioned the EPA's deadline for communicating 2027 NOx standard changes and the impact on the supply chain. Finally, Mr. Raso sought clarification on the geographical cadence of Q4 deliveries.

Answer

Brice Poplawski, CFO, noted expected growth from tariffs and bonus depreciation incentives. Preston Feight, CEO, added that customer feedback is mixed, with vocational and LTL segments leveraging incentives, while the truckload sector faces challenges. He emphasized that PACCAR is prepared for the 35 mg NOx standard, which is the current law, but also capable of supporting a 200 mg standard if it changes. Mr. Feight clarified that Q4 deliveries would see a shift, with North America having more holidays and Europe fewer, leading to similar overall delivery quantities, with the order book 60-70% full.

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David Raso's questions to PACCAR (PCAR) leadership •

Question

David Raso asked for the geographic composition of the Q4 delivery forecast to better understand margin implications. He also inquired about the status of bottlenecks with vocational body builders and a potential pre-buy related to a key engine supplier.

Answer

President and CFO Harrie Schippers indicated that with more production days, European deliveries would be up by a couple of thousand units, implying a sequential decline in North America. CEO Preston Feight added that the vocational market has stabilized at a high level and body builders are catching up. He also affirmed PACCAR's strong position regarding engine supply and readiness for future emissions standards.

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David Raso's questions to PACCAR (PCAR) leadership • Q1 2025

Question

David Raso asked about the relationship between production and retail sales for Q2 and the full year. He also sought to confirm if the challenging sequential decremental margin in Q2 was due to a timing mismatch between the full impact of tariffs and the partial benefit of pricing actions.

Answer

CEO Preston Feight indicated that production and retail are in a good position relative to each other for Q2 and generally for the full year. He confirmed Raso's assessment that the sequential margin change is primarily due to the full-quarter impact of tariffs without the ability to fully pass that into price yet.

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David Raso's questions to PACCAR (PCAR) leadership • Q4 2024

Question

David Raso questioned how the strengthening market outlook is influencing pricing for upcoming models and asked for PACCAR's reaction to recent White House executive orders regarding potential pre-buy activity.

Answer

CEO Preston Feight stated that PACCAR is prepared for current regulations and can adapt to any changes. He anticipates a strengthening price position as 2025 progresses and beyond, driven by market conditions and the performance of PACCAR's trucks. He also clarified that the notion of a '26 model year shipping in April did not resonate with PACCAR's plans.

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David Raso's questions to DEERE & (DE) leadership

David Raso's questions to DEERE & (DE) leadership • Q3 2025

Question

David Raso asked if the typical seasonal revenue patterns for the large ag business would hold into 2026, given the contrast between a challenged U.S. market and more positive international trends.

Answer

Josh Beal, Director of Investor Relations, noted that a shift in seasonality is already evident in the Q4 2025 forecast, which implies a sequential sales increase for large ag. This is driven by stronger shipments to South America, which is altering the typical pattern. He stated it was too early to provide clarity on 2026 seasonality.

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David Raso's questions to DEERE & (DE) leadership • Q2 2025

Question

David Raso pressed for more details on the weak implied second-half large ag margins, suggesting the guidance seemed conservative and asking for clarification on the primary drivers beyond what was initially stated.

Answer

CFO Josh Jepsen provided a more detailed breakdown, quantifying the tariff impact as a 2 to 2.5 percentage point headwind to margins in the second half of the year. He reiterated that the small year-over-year sales change makes the decremental math appear outsized. He also added that material cost favorability, while still positive, will be less pronounced in the second half compared to the first.

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David Raso's questions to DEERE & (DE) leadership • Q1 2025

Question

David Raso sought clarification on the plan for North American new equipment inventory, asking if the goal to end the year 'unchanged' meant no further reductions were planned, especially for row-crop tractors.

Answer

Executive Josh Beal confirmed the plan is to produce in line with retail demand, resulting in year-end inventory levels being relatively unchanged from the prior year. CFO Josh Jepsen clarified that the elevated inventory is concentrated in mid-sized tractors (e.g., 6000 series), not high-horsepower row-crop tractors, and that the company is actively underproducing those mid-sized models to correct the imbalance.

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David Raso's questions to DEERE & (DE) leadership • Q4 2024

Question

David Raso asked two questions: first, about the quarterly earnings cadence for 2025, implying a return to year-over-year growth by Q3, and second, about the potential impacts of the new U.S. administration on tariffs and farmer sentiment.

Answer

An executive confirmed a significant Q1 decline, with sales down 15-20% sequentially and margins 300-400 bps below the full-year guide, followed by improving comps that could lead to 'flattish, if not up a little bit' results by Q3/Q4. On the new administration, CEO John May stated that Deere is well-positioned, highlighting that over 75% of products sold in the U.S. are assembled domestically and that the Ag & Turf division is a net exporter, mitigating potential tariff impacts.

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David Raso's questions to ESAB (ESAB) leadership

David Raso's questions to ESAB (ESAB) leadership • Q2 2025

Question

David Raso of Evercore ISI asked for specifics on the "EU stimulus measures already in motion" and the outlook for Europe. He also inquired about the potential for larger acquisitions in Gas Control and asked for the organic growth split between equipment and consumables.

Answer

President & CEO Shyam Kambeyanda clarified that initial stimulus spending on energy and defense has begun, but larger programs have not fully kicked in, keeping Europe stable. He confirmed larger deals in Gas Control are possible, especially through proprietary processes, and noted that equipment revenue was impacted by automation delays in the Americas. CFO Kevin Johnson added that the outlook for Europe is for flattish growth.

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David Raso's questions to ESAB (ESAB) leadership • Q2 2025

Question

David Raso inquired about the outlook for Europe, the tangible impact of EU stimulus, and the region's margin profile. He also asked about the potential for larger acquisitions in the Gas Control business and requested a breakdown of organic growth between equipment and consumables.

Answer

President & CEO Shyam Kambeyanda described Europe as stable, with early benefits from energy and defense spending, but noted the larger stimulus impact has not yet materialized. He confirmed European margins are very strong. He also affirmed that larger, proprietary deals in Gas Control are possible. The Q2 equipment revenue weakness was attributed to delayed automation orders in the Americas.

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David Raso's questions to ESAB (ESAB) leadership • Q2 2025

Question

Inquired about the outlook for Europe and the impact of stimulus, the potential for large-scale M&A in the Gas Control segment, and the organic growth breakdown between equipment and consumables.

Answer

Europe is stable with flattish growth expected, as major stimulus has not yet fully materialized; its margins are very strong. The M&A pipeline for Gas Control includes potential large, EWM-sized deals. Equipment sales were down organically due to automation order delays in the Americas, which are expected to reverse.

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David Raso's questions to ESAB (ESAB) leadership • Q4 2024

Question

Sought clarity on the timing of Americas volume recovery, the organic growth outlook for Europe, currency translation effects, and the rationale for the conservative 2025 pricing guidance in the Americas.

Answer

Americas volumes are guided to turn positive in Q4 2025. Europe is expected to have muted volumes in H1 and slight growth in H2. The conservative pricing outlook is tied to assumptions about stable steel prices, and contracts allow for pass-through of cost increases if necessary.

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David Raso's questions to ESAB (ESAB) leadership • Q3 2024

Question

David Raso from Evercore ISI sought clarification on the Q4 organic growth guidance and the drivers of expected negative volumes in the Americas. He also asked about the growth outlook and M&A potential for the gas control business heading into 2025.

Answer

CFO Kevin Johnson confirmed the guidance math and reiterated expectations for slightly negative volumes in the Americas for Q4. CEO Shyam Kambeyanda explained that Q3 Americas softness was partly due to weather and a slow DIY channel but the market is not worsening. For 2025, he expects the gas control business to grow at the 'higher side of low single digits' with a premier margin profile and noted the M&A funnel for accretive deals is the 'strongest it's ever been'.

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David Raso's questions to CUMMINS (CMI) leadership

David Raso's questions to CUMMINS (CMI) leadership • Q2 2025

Question

David Raso of Evercore ISI pressed for quantification on the outlook for Engine segment EBITDA margins in the second half of the year, given the sharp expected decline in truck volumes, and asked about expected decremental margins.

Answer

CFO Mark Smith stated that while he could not provide specific guidance, Engine margins will be under significant pressure and decline in the second half due to the severe drop in volumes. He emphasized the decline is cyclical, not structural, and that full-year decremental margins should be in line with prior cycles. He noted that orders are at multi-year lows but expects performance to rebound quickly when volumes recover.

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David Raso's questions to CUMMINS (CMI) leadership • Q2 2025

Question

David Raso of Evercore ISI pressed for a quantitative outlook on Engine segment EBITDA margins for the second half of the year, given the sharp decline in truck volumes.

Answer

CFO Mark Smith declined to provide specific guidance but acknowledged that margins will face significant pressure due to historically weak order levels. He emphasized the decline is cyclical, not structural, and expects margins to rebound with volumes. He also noted that engineering spending remains elevated due to a lack of regulatory clarity, which prevents cost reductions in that area.

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David Raso's questions to CUMMINS (CMI) leadership • Q1 2025

Question

David Raso questioned whether concerns about demand destruction were based on specific customer feedback or a general macro view, and asked for quantification of tariff exposure.

Answer

CEO Jennifer Rumsey clarified that the concern stems from broad uncertainty, citing direct conversations with OEM and fleet customers who are pausing orders to await clarity. CFO Mark Smith declined to quantify specific country exposure but highlighted that Cummins' U.S. on-highway engine plants are USMCA compliant and that tariff impacts would be detailed in future quarterly results.

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David Raso's questions to CUMMINS (CMI) leadership • Q4 2024

Question

David Raso sought to understand the margin expansion in the Engine and Components segments by asking for a breakdown of the increased D&A between them. He also questioned the drivers of the underlying operational margin improvement in Engines to better assess earnings power.

Answer

CFO Mark Smith confirmed that the majority of the incremental D&A increase would be in the Engine and Components segments, reflecting recent capital investments. For the Engine segment's near-term operating margin improvement, Smith pointed to continued strength and pricing opportunities in the aftermarket, as well as general cost control.

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David Raso's questions to CUMMINS (CMI) leadership • Q3 2024

Question

David Raso of Evercore ISI asked about the timing of the 2027-compliant engine launch, the strategy for an early introduction, and the potential impact of the election. He also inquired about the cost implications for customers buying the new engine in 2026.

Answer

CEO Jennifer Rumsey stated that Cummins does not expect the election to alter the 2027 regulations. She announced the company's intention to launch the diesel version of its 15-liter helm platform in 2026, ahead of the mandate, to deliver a 7% fuel efficiency improvement. She clarified that while the new engine will have added content and technology, the longer emissions warranty requirement does not take effect until 2027, meaning customers buying in 2026 will not incur that specific cost.

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David Raso's questions to CATERPILLAR (CAT) leadership

David Raso's questions to CATERPILLAR (CAT) leadership • Q2 2025

Question

David Raso of Evercore ISI asked if Caterpillar could reprice its substantial backlog to offset tariff headwinds and drive margin growth into 2026, given the strong demand profile.

Answer

CEO Joe Creed stated that while there is flexibility on backlog pricing, the primary goal is dollar operating profit (OPAC), not just margin percentage. He noted a preference to mitigate tariffs through other means before using pricing. CFO Andrew Bonfield added that operating leverage from volume is the most optimal way to manage margins for Caterpillar.

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David Raso's questions to CATERPILLAR (CAT) leadership • Q1 2025

Question

David Raso questioned if the strong order growth was a 'prebuy' ahead of tariff-related price hikes and asked critically whether the current backlog is price-protected. He also inquired if mitigation efforts, like shifting production from China to Brazil, were already factored into guidance.

Answer

Joe Creed, COO and incoming CEO, stated there is 'no evidence of widespread pre-buying,' arguing that customers are unlikely to purchase equipment without having work for it. He clarified that while some long-term contracts are fixed, Caterpillar generally retains pricing flexibility in its backlog. He also noted that the company's downside scenario was calculated before any mitigating actions, implying that such production shifts are not yet fully factored in.

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David Raso's questions to CATERPILLAR (CAT) leadership • Q4 2024

Question

David Raso of Evercore ISI questioned the drivers of 2025 segment margins, focusing on why price/cost was expected to be negative and whether rising manufacturing costs were concentrated in the Energy & Transportation segment.

Answer

Executive Andrew R. Bonfield clarified that manufacturing cost headwinds existed in both Construction Industries (due to negative absorption) and Energy & Transportation (due to increased labor for higher output). For 2025, he expects declining material costs to be offset by absorption headwinds and higher depreciation costs.

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David Raso's questions to CATERPILLAR (CAT) leadership • Q3 2024

Question

David Raso asked for more clarity on 2025, seeking to understand when the pricing discount headwind in Construction Industries would be most acute and requesting a quantifiable measure of the large engine throughput increase for E&T.

Answer

Chairman and CEO Jim Umpleby stated the large engine capacity increase is a multi-year plan and did not provide a specific 2025 output figure. CFO Andrew Bonfield explained the pricing reserve accrual is based on a 12-month historical basis, meaning the headwind could impact results for several quarters, with more detail to be provided in January.

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David Raso's questions to CNH Industrial (CNH) leadership

David Raso's questions to CNH Industrial (CNH) leadership • Q2 2025

Question

David Raso from Evercore ISI asked for the full-year outlook on price versus cost for the agriculture segment and sought clarification on where tariff impacts would be categorized in the financial reporting.

Answer

CFO Jim Nicholas confirmed that the price-cost spread is expected to be positive for the full year. CEO Gerrit Marx added that the positive cost performance in Q2 was partly aided by FIFO accounting on materials purchased before tariffs hit, an effect that will not repeat. He confirmed tariff impacts are included within the 'production cost' line item in their financial waterfalls.

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David Raso's questions to OSHKOSH (OSK) leadership

David Raso's questions to OSHKOSH (OSK) leadership • Q2 2025

Question

David Raso of Evercore ISI questioned the confidence in the Access segment's second-half margin guidance, focusing on the timing of pricing actions versus tariff cost impacts. He also inquired about the drivers for the projected margin improvement in the Vocational segment and whether that strength is already reflected in the current backlog.

Answer

CFO Matthew Field explained that for the Access segment, tariff cost impacts are expected primarily in Q4, with mitigation actions underway. For the Vocational segment, he attributed the second-half margin improvement to increased production capacity and volume growth. CEO John Pfeifer added that modest pricing benefits from the Vocational backlog will continue to be realized over the next two to three years.

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David Raso's questions to OSHKOSH (OSK) leadership • Q1 2025

Question

David Raso sought to confirm that segment guidance is unchanged aside from the net tariff impact, which is mostly allocated to Access. He also asked about the strategic thinking behind moving AWP assembly to Italy to mitigate EU tariffs.

Answer

CFO Matthew Field agreed this was a fair characterization. CEO John Pfeifer explained the move to Italy was decisive because the EU tariff situation was stable and clear. In contrast, the current U.S. tariff environment is more dynamic with rates for various countries still under negotiation, warranting a more cautious approach before making other major structural changes to the supply chain.

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David Raso's questions to OSHKOSH (OSK) leadership • Q4 2024

Question

David Raso from Evercore ISI questioned why the implied incremental margin for the Vocational segment in 2025 wasn't stronger than 25%. He also asked for a breakdown of which categories within the segment were expected to grow above or below the segment's average revenue growth rate, specifically asking if Pierce was the fastest growing.

Answer

CFO Matt Field explained that the Vocational segment's margin guidance reflects ongoing investments in capacity and growth initiatives. He highlighted strong performance and growth opportunities across Pierce, McNeilus (refuse), and AeroTech but declined to provide specific growth rates for each. CEO John Pfeifer added that all businesses within the Vocational segment are growing and that the segment complements the Access business well.

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David Raso's questions to TEREX (TEX) leadership

David Raso's questions to TEREX (TEX) leadership • Q2 2025

Question

David Raso questioned the timing and tone of 2026 order conversations for the MP and Aerials segments, particularly regarding replacement demand and the impact of bonus depreciation, and sought clarification on the second-half EPS cadence.

Answer

President & CEO Simon A. Meester noted that discussions with larger customers follow a normal Q3/Q4 cadence, while smaller customers remain cautious. He highlighted that MP fleets are aging, creating a need for replacement. SVP & CFO Jennifer Kong-Picarello confirmed that Q4 EPS is expected to be 10-20% higher than Q3, driven by the timing of tariff mitigation actions.

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David Raso's questions to TEREX (TEX) leadership • Q1 2025

Question

David Raso sought clarity on the Aerials segment's margin progression from Q1 to Q2, asking about the implied sequential revenue growth and the timing of tariff impacts needed to reach a 10% operating margin.

Answer

CEO Simon Meester indicated a "normal seasonal jump up" in Q2 revenue. CFO Jennifer Kong-Picarello added that the 550 basis point margin impact from Q1's production cuts will not repeat, which, combined with higher volume, will drive the return to double-digit margins. Meester clarified the $0.40 tariff impact is mostly a Q3 story for Aerials, allowing time to mitigate.

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David Raso's questions to TEREX (TEX) leadership • Q4 2024

Question

David Raso presented a detailed calculation suggesting legacy business decremental margins were closer to 39%, challenging the company's 25% target. He asked for the assumed 2025 stand-alone EBIT margin for the acquired ESG business to clarify the math.

Answer

Management confirmed the 2025 EBIT margin assumption for the stand-alone ESG business is comparable to the 21.9% achieved in the Q4 stub period. Executive Julie Beck addressed the decremental margin discrepancy by explaining that the AWP segment will experience significant margin pressure in Q1 due to production cuts, but is expected to perform within the 25% decremental target for the remainder of the year (Q2-Q4).

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David Raso's questions to Gates Industrial Corp (GTES) leadership

David Raso's questions to Gates Industrial Corp (GTES) leadership • Q2 2025

Question

David Raso from Evercore ISI asked about the expected organic growth cadence between the Power Transmission (PT) and Fluid Power (FP) segments for the remainder of the year. He also inquired about the carryover of cost savings from 2025 to 2026 and any potential offsetting investments.

Answer

CEO Ivo Jurek stated that he expects the Power Transmission segment to continue outperforming Fluid Power, largely due to strong growth in personal mobility. CFO Brooks Mallard added that while there will be a slight carryover of savings into 2026, the full benefit of current restructuring activities has been delayed by tariff volatility and will not be fully realized until 2026.

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David Raso's questions to Gates Industrial Corp (GTES) leadership • Q2 2025

Question

David Raso of Evercore ISI asked about the expected organic growth cadence between the Power Transmission and Fluid Power segments for the remainder of the year. He also inquired about the carryover of savings from restructuring actions into 2026 and any potential offsets.

Answer

CEO Ivo Jurek stated that he expects the Power Transmission segment to continue outperforming Fluid Power, largely due to strong growth in personal mobility. CFO Brooks Mallard added that while some restructuring savings are included in 2025 guidance, the full run-rate benefit of these actions will be delayed until 2026 due to complexities related to tariffs and trade negotiations.

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David Raso's questions to Gates Industrial Corp (GTES) leadership • Q2 2025

Question

David Raso of Evercore ISI inquired about the expected organic growth cadence between the Power Transmission (PT) and Fluid Power (FP) segments for the rest of the year. He also asked about any cost savings from factory activities that might carry over into 2026.

Answer

CEO Ivo Jurek suggested that the Power Transmission segment will likely continue to outperform Fluid Power for the remainder of the year, largely due to strength in personal mobility. CFO Brooks Mallard added that while some restructuring savings are in 2025 guidance, the full impact of these activities has been delayed and will not be realized until 2026.

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David Raso's questions to Gates Industrial Corp (GTES) leadership • Q2 2025

Question

David Raso from Evercore ISI asked about the expected organic growth cadence between the Power Transmission and Fluid Power segments for the rest of the year. He also inquired about the timing of cost savings from restructuring activities rolling into 2026.

Answer

CEO Ivo Jurek indicated that the Power Transmission segment would likely continue to outperform Fluid Power, driven by strength in personal mobility. CFO Brooks Mallard explained that while some restructuring savings are included in 2025 guidance, the full run-rate benefit of these actions will not be realized until 2026 due to project timing.

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David Raso's questions to Gates Industrial Corp (GTES) leadership • Q2 2025

Question

David Raso from Evercore ISI inquired about the expected organic growth cadence between the Power Transmission and Fluid Power segments for the remainder of the year, and asked about the timing of savings from restructuring activities rolling into 2026.

Answer

CEO Ivo Jurek indicated that the Power Transmission segment would likely continue to outgrow Fluid Power due to strength in personal mobility. CFO Brooks Mallard noted that while some restructuring savings are included in 2025 guidance, the full run-rate benefit of these actions will not be realized until 2026 due to project timing.

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David Raso's questions to Gates Industrial Corp (GTES) leadership • Q4 2024

Question

David Raso from Evercore ISI asked for clarification on management's comment about a "widened capital deployment aperture," inquiring about leverage targets, the company's post-Blackstone strategy, and the current M&A landscape.

Answer

CEO Ivo Jurek explained that with a stronger balance sheet, the company has greater flexibility. He noted that while Gates has strong cash flow for deleveraging, the stock is considered significantly undervalued, making buybacks and high-return internal organic investments attractive uses of capital. While the company is open to M&A for highly accretive businesses at reasonable multiples, the current focus remains on these internal and shareholder return opportunities.

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David Raso's questions to Gates Industrial Corp (GTES) leadership • Q3 2024

Question

David Raso of Evercore ISI questioned if there were signs of a bottom in the soft ag, construction, and personal mobility markets, and asked about the possibility of accelerating facility closures to realize savings sooner.

Answer

CEO Ivo Jurek confirmed that personal mobility is stabilizing and is expected to return to growth in 2025. However, he sees continued weakness in ag and construction, with a bottom not likely until the latter part of next year. Regarding closures, Jurek noted they have already accelerated actions, with three closures announced in the second half of the year to be completed by year-end. CFO L. Mallard reiterated the plan to achieve a $40 million savings run rate by the end of 2026.

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David Raso's questions to UNITED RENTALS (URI) leadership

David Raso's questions to UNITED RENTALS (URI) leadership • Q2 2025

Question

David Raso of Evercore ISI asked United Rentals about its second-half margin outlook, focusing on the price-cost spread, the impact of faster-growing ancillary revenue, and the company's visibility into 2026 given its increasing exposure to large projects.

Answer

President & CEO Matthew Flannery explained that the margin drag from ancillary revenue, particularly delivery costs from the Yak acquisition, should lessen as it is lapped. EVP & CFO William Grace added that while price-cost management is effective, costs for repositioning fleet remain, and the primary driver for improved incrementals will be ancillary growth normalizing closer to core rental growth. Regarding 2026, Flannery noted that while visibility is limited outside of large projects, key tailwinds from mega-projects and infrastructure are expected to continue.

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David Raso's questions to UNITED RENTALS (URI) leadership • Q1 2025

Question

David Raso inquired about the implied revenue growth for the remainder of the year, questioning if the guidance suggests minimal contribution from fleet productivity. He also asked how potential tariffs on new equipment could impact customer decisions, possibly favoring rental, and influence pricing conversations.

Answer

Executive Matthew Flannery stated that 2025 CapEx is largely negotiated and unaffected by tariffs. He noted that future tariff-driven price increases from OEMs would likely be passed on and could be managed by sourcing from non-tariff-impacted partners. Executive William Grace added that uncertainty generally favors rental over ownership and clarified that the revenue outlook incorporates inflation, with fleet productivity expected to remain steady and positive, consistent with the first quarter's performance.

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David Raso's questions to UNITED RENTALS (URI) leadership • Q3 2024

Question

David Raso inquired about the qualitative outlook for 2025, asking for the expected contributors to growth between Specialty and General Rental, and between fleet productivity and fleet growth. He also asked for commentary on the attractiveness of the mobile modular space and the broader M&A landscape.

Answer

Executive Matthew Flannery provided a qualitative outlook, anticipating another year of growth in 2025 driven by a strong project pipeline and continued momentum in the Specialty business, which he noted has a history of over 20% annual growth. For M&A, Flannery expressed satisfaction with the General Finance acquisition and stated that while the company is actively exploring opportunities, the strategic, cultural, and financial bar for acquisitions remains high.

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David Raso's questions to Ingersoll Rand (IR) leadership

David Raso's questions to Ingersoll Rand (IR) leadership • Q4 2024

Question

David Raso questioned why the company's pricing contribution to organic growth is expected to accelerate in the second half of 2025, as implied by the full-year guidance.

Answer

CFO Vik Kini confirmed this observation, attributing the expected acceleration to the timing of planned mid-year pricing actions across various businesses. He noted that this phasing, with a healthier price contribution in the back half of the year, is a consistent expectation for both the ITS and PST segments.

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David Raso's questions to Ingersoll Rand (IR) leadership • Q3 2024

Question

David Raso asked for an organic breakdown of ITS orders to better understand the impact of a potential bottoming in China and specifically requested the ITS organic order growth rate excluding China.

Answer

CFO Vik Kini provided a regional breakdown, identifying Asia (specifically China) and Power Tools as the primary detractors from organic growth, while the Americas was the strongest region. When pressed, he confirmed that ITS organic order growth ex-China would be in the "low single-digit realm," implying a positive number.

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David Raso's questions to Vontier (VNT) leadership

David Raso's questions to Vontier (VNT) leadership • Q4 2024

Question

David Raso asked for a breakdown of the expected 35-50 bps of operating margin expansion by business segment for the full year. He also inquired about the profitability and long-term growth outlook for the dispenser business, noting surprise that EFS margin expansion wasn't guided higher given its top-line strength.

Answer

CFO Anshooman Aga detailed that the largest margin expansion in 2025 will come from Mobility Technologies (over 100 bps), with EFS up slightly and Repair Solutions flat to slightly up. Regarding dispensers, Aga noted that while it's an attractive business, margins are impacted by geographic and product mix, with aftermarket and environmental solutions being higher. CEO Mark Morelli added that significant long-term margin runway exists in EFS due to simplification opportunities and pricing power.

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David Raso's questions to TIMKEN (TKR) leadership

David Raso's questions to TIMKEN (TKR) leadership • Q4 2024

Question

David Raso inquired about the fourth-quarter book-to-bill ratio, the backlog size, and the expected cadence of the organic sales decline in the first half of 2025. He also asked about the potential for future cost actions beyond the current plan.

Answer

CFO Philip Fracassa noted the order book is down year-over-year but supports the full-year guide, with the first-half organic decline expected to be similar to Q4. CEO Tarak Mehta indicated that plans for any additional actions beyond the announced $75 million in savings for 2025 would be detailed later in the year.

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David Raso's questions to TIMKEN (TKR) leadership • Q3 2024

Question

David Raso questioned the implied Q4 organic growth decline, asking for customer feedback on early 2025 and whether the focus will be on growth or cost control. He also sought clarification on the roughly 100 basis points of one-time costs in Q3 and the drivers for the sequential margin decline into Q4.

Answer

President and CEO Tarak Mehta explained that while a Q4 to Q1 sequential increase is typical, it's too early to call 2025 due to mixed signals. CFO Philip Fracassa clarified the Q4 organic outlook is weaker due to tougher comps in aerospace and rail. He confirmed about 100 bps of margin headwinds in Q3 from logistics, currency, and a customer accrual. The Q4 margin decline is driven by lower volume and a cautious outlook on costs associated with production slowdowns.

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David Raso's questions to Eaton Corp (ETN) leadership

David Raso's questions to Eaton Corp (ETN) leadership • Q4 2024

Question

David Raso of Evercore ISI requested quantification of the new capacity being added in the Electrical business and asked if the 2025 organic growth rate could be structurally sustainable for multiple years.

Answer

Craig Arnold, Chairman & CEO, reiterated that the company is making significant multiyear investments to ensure capacity is not a bottleneck but did not provide a specific percentage increase. Paulo Sternadt, President & COO, deferred the question on the long-term sustainable growth rate to the company's upcoming Investor Day in March, where 2030 targets will be outlined.

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David Raso's questions to Parker-Hannifin (PH) leadership

David Raso's questions to Parker-Hannifin (PH) leadership • Q2 2025

Question

David Raso of Evercore ISI sought clarification on the Q3/Q4 aerospace organic growth cadence and asked about the specific drivers of the expected Q4 industrial recovery. He also inquired about the potential margin mix impact as the recovery unfolds, particularly regarding the high-margin distribution channel.

Answer

CEO Jenny Parmentier clarified the aerospace growth outlook is 9.5% for Q3 and 5% for Q4, with the Q4 figure impacted by a difficult prior-year comparison of +19%. She noted the industrial recovery is expected based on positive distributor sentiment and historical cycle lengths, but confirmed the distribution recovery is 'still on the come.' CFO Todd Leombruno added that Q4 aerospace shipments are projected to be a record in absolute dollars.

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David Raso's questions to Parker-Hannifin (PH) leadership • Q1 2025

Question

David Raso asked about the resilience of North American margins despite lower organic sales, seeking to understand the health of the distribution channel versus OEM weakness. He also requested an update on the M&A pipeline, including valuation multiples and deal timing.

Answer

CEO Jenny Parmentier clarified that destocking is occurring at the OEM level, not in the distribution channel, where sentiment remains positive despite project delays. On M&A, she stated the pipeline is active, but the company is disciplined, seeking accretive deals where it is the 'best owner,' noting that timing is a significant factor. CFO Todd Leombruno added the pending divestiture has a favorable 40 basis point impact on North American margins.

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David Raso's questions to Parker-Hannifin (PH) leadership • Q3 2025

Question

David Raso sought clarification on the announced tariff impact, asking if the estimated 3% of COGS is an annualized run-rate for fiscal 2026 or if it will ramp up. He also asked how much of that impact is hitting in the current quarter (Q4).

Answer

Executive Todd Leombruno confirmed the $375 million tariff impact, or 3% of COGS, is an annualized number based on current run rates and is not expected to increase unless new tariffs are announced. He stated that this is the current run rate with no ramp-up, and that mitigation actions are already in place to offset the costs within the quarter.

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