Managing Director and Senior Equity Research Analyst at Goldman Sachs
Joe Ritchie is a Managing Director and Senior Equity Research Analyst at Goldman Sachs, specializing in the coverage of industrials, utilities, and technology companies with a focus on power infrastructure and automation. He actively covers notable firms such as Rockwell Automation, Eaton, and several major U.S. electric utilities, having issued over 550 price targets and ratings across 38 stocks with a documented price target met ratio of 86% and an average upside of 21%. Ritchie began his analyst career in the late 2010s and has developed a strong reputation for the accuracy of his forecasts, achieving a success rate above 62% and average analyst returns nearing 19% according to independent platforms. Professionally, he holds registration with FINRA and maintains securities licenses in alignment with Goldman Sachs standards, in addition to being a recognized contributor to flagship industry reports and presentations.
Inquired about the overall demand environment across key end markets and sought specific details on the significant growth in the energy business backlog.
The company has a strong trailing twelve-month book-to-bill ratio and healthy funnels across all segments. The energy backlog growth is driven by nuclear refurbishment projects (CANDU reactors), not yet by SMRs, which are a future opportunity.
Joe Ritchie inquired about the current demand environment and full-year outlook, noting the lumpy nature of orders, and asked for more detail on the significant backlog growth in the energy segment.
CEO Andrew Hider emphasized a long-term view, highlighting a strong trailing twelve-month book-to-bill ratio of 1.17 and healthy funnels across Life Sciences, Energy, and Food. CFO Ryan McLeod added that orders, excluding transportation, grew over 10% in the first half of the calendar year. He confirmed the energy backlog growth was driven primarily by nuclear refurbishment activity for CANDU reactors.
Joe Ritchie of Goldman Sachs questioned why the rare earth magnet issue appeared more significant for Regal Rexnord than for its peers and asked about any risk of market share loss. He also asked for the biggest swing factors influencing the Q3 guidance for the AMC segment.
CEO Louis Pinkham explained that Regal Rexnord's peers in the ultra-high precision motor space are often private, making direct comparisons difficult. He asserted that the company's global nature and ability to shift production to China is a competitive advantage, not a weakness, and that they see a potential opportunity to gain share from peers impacted by tariffs. For Q3, Pinkham identified the flow of magnets and the ability to accelerate data center project execution as the key swing factors within the AMC guidance range, expressing confidence in hitting the midpoint.
Joe Ritchie from Goldman Sachs inquired about the full-year outlook for Electrical Americas and Global orders, the growth of the backlog, and whether recent order strength extends beyond the data center market.
CEO Paulo Ruiz confirmed strong order momentum is expected to continue, particularly in Electrical Americas, leading to a book-to-bill ratio above one for the year. He clarified that excluding a prior-year large order, underlying Electrical Americas orders were up 11% on a trailing-twelve-month basis, with strength also seen in commercial, institutional, and utility markets.
Joe Ritchie from Goldman Sachs asked about the bankability of growth from the nuclear installed base, the timing of the $350 million order pipeline, and whether a UK project's cost increase would create a lingering margin issue for the Nuclear and Safety segment.
CEO Tom Logan affirmed the durability of installed base growth, calling it a 'generational trend' driven by fundamental power needs and pro-nuclear policy shifts. CFO Brian Schopfer added that some pipeline projects have shifted but the overall opportunity remains robust, with the 2026 pipeline also building. Schopfer clarified the UK project cost was a one-time accounting true-up, not a lingering issue, and reiterated the company's commitment to its 30% EBITDA margin target by 2028.
Joe Ritchie from Goldman Sachs inquired about current short-cycle trends within nVent's industrial footprint and the outlook for the second half of the year. He also asked about the company's capacity planning for liquid cooling over the next 12-24 months and whether current investments are sufficient.
CEO Beth Wozniak reiterated the full-year guidance for low-to-mid single-digit growth in the industrial vertical, noting positive sell-in and sell-out trends through distribution. On capacity, she confirmed that nVent is making investments but anticipates the need for further capital and capacity expansion into 2026 and beyond as the liquid cooling portfolio and customer base expand.
Joe Ritchie sought clarification on the ILC Dover impairment, asking if it was a new issue, and addressed investor concerns about the muted order growth in the compressor business over the past two years.
CEO Vicente Reynal clarified the impairment was a new development related to a delayed customer project for the next-generation International Space Station. Regarding compressors, he reaffirmed the long-term growth outlook, attributing recent muted growth to the normalization of large, one-time projects and stating the underlying base business remains stable.
Joe Ritchie requested a deeper analysis of the Svanohoi acquisition's greater than 40% growth, asking what is driving its significant outperformance. He also sought to reconcile ITT's strong pump orders with commentary about project delays and aggressive pricing in the market.
CEO Luca Savi and CFO Emmanuel Caprais attributed Svanohoi's success to 'flawless execution,' product differentiation, and strong performance across LNG, LPG, and ammonia applications, noting H1 orders grew over 80%. On the pumps business, Savi stated that despite a couple of minor delays and price competition, ITT's strong order book is primarily a 'market share gain story' driven by superior service and project execution that fosters customer loyalty.
Joe Ritchie of Goldman Sachs requested a breakdown of the $0.25 midpoint increase in the full-year EPS guidance. He also asked about the company's confidence in the residential business returning to its long-term GDP+ growth framework beyond 2025.
EVP & CFO Chris Kuehn explained the EPS guidance raise was driven by the Q2 operational beat, continued strength in Commercial HVAC, and a minor FX tailwind, which more than compensated for a roughly $300 million reduction in the full-year residential revenue outlook. Chair & CEO Dave Regnery affirmed that the Q2 residential issue was an isolated incident, not a structural problem, and expressed confidence in returning to the GDP+ framework, promising a more detailed 2026 outlook on the Q4 call.
Joe Ritchie of Goldman Sachs questioned the composition of the 5%+ core sales growth guidance, asking if it was primarily price-driven, and inquired about the margin cushion from being price-cost positive amid changing tariff impacts.
President, CEO & Chairman Todd Adams described the 5% growth guidance as a conservative 'placeholder,' noting it includes slightly more price than initially planned. He attributed strong margins not just to pricing and supply chain moves, but also to a 210% YoY increase in continuous improvement projects, which he described as a sustainable driver of performance.
Joe Ritchie of Goldman Sachs asked for an initial framework for fiscal 2026, given the record backlog, and inquired about plans for long-term targets and a potential Investor Day.
CFO Marc Vandiepenbeeck stated it was too early for a detailed 2026 outlook but reaffirmed the long-term algorithm of mid-single-digit sales growth, over 25% incrementals, and double-digit EPS growth. He noted the new business system could improve these metrics and that an Investor Day would be scheduled after the strategic review is complete. CEO Joakim Weideminis added that the new system aims to decouple growth from historical investment levels.
Joe Ritchie of Goldman Sachs asked for an update on the refrigerant canister supply issue and its impact in Q2. He also requested more detail on the performance of the non-data center commercial business within the Climate Solutions Americas (CSA) segment.
Chairman & CEO David Gitlin confirmed that the canister issue is no longer a problem, as the team took aggressive action to pre-charge units and ensure supply. Regarding the non-data center business, Gitlin highlighted that it grew 20% in the quarter within CSA, driven by strong performance in applied systems, service, and controls, as well as wins in mega-projects and U.S. manufacturing reshoring.
Joe Ritchie of Goldman Sachs questioned the timing of the September price increase and the potential for the Contractor segment to recover its tariff-impacted margins in the second half of the year.
President and CEO Mark Sheahan stated the September timing was to allow for tariff assessment and to give channel partners adequate notice, noting the reception was positive. Regarding margins, he explained that while there's potential for a rebound, it is highly dependent on future sales volume, and he is satisfied with overall profitability in the current sluggish environment.
Joe Ritchie of Goldman Sachs asked about the timing and customer reception of the September price increase and questioned if the Contractor segment could recoup recent margin pressures later in the year.
CEO Mark Sheahan stated the price increase timing was to allow for tariff assessment and to give partners notice, adding that the reception has had 'no surprises whatsoever.' He noted that a Contractor margin rebound is dependent on volume but expressed overall satisfaction with profitability in a 'choppy' environment, emphasizing disciplined spending and cash flow generation.
Joe Ritchie from Goldman Sachs asked about the relationship between tariffs and the demand contingency, and which segments might benefit if tariffs are permanently lower. He also inquired about the decision timeline for the strategic review of the PSS and warehouse businesses.
SVP & CFO Mike Stepniak responded that short-cycle businesses are managing tariff impacts well, with the main uncertainty residing in the energy business due to potential project and catalyst order delays. Chairman & CEO Vimal Kapur stated that the strategic review process has begun and he expects to provide more clarity on the available options by the end of the year, though a definitive timeline cannot be set.
Joe Ritchie of Goldman Sachs asked about the relationship between tariffs and the demand contingency, and which segments might benefit if tariffs were permanently lowered. He also inquired about the decision timeline for the strategic alternatives for the PSS and warehouse automation businesses.
SVP & CFO Mike Stepniak noted that short-cycle businesses are managing tariffs well, but the main uncertainty relates to energy project orders and catalyst demand, which can be delayed by customers. Chairman & CEO Vimal Kapur stated that they expect to have better clarity on the strategic options for PSS and warehouse automation by the end of the year, with a desire to converge the timing with the other portfolio separations, though no certain timeline can be set yet.
Joe Ritchie sought to reconcile the Power segment's new equipment orders, questioning the relationship between the gigawatts booked and the sequential increase in the dollar value of those orders.
CFO Ken Parks clarified the gigawatt order and conversion figures. CEO Scott Strazik explained the dollar-to-gigawatt variance by highlighting the sales mix, stating that the first half of the year was weighted toward simple-cycle orders, while the second half will feature a substantially larger mix of higher-value combined-cycle orders.
Joe Ritchie sought to reconcile the Power segment's new equipment orders, questioning how order dollars could increase sequentially while the number of gigawatts booked into backlog appeared to decrease.
CFO Ken Parks first clarified the order flow, noting 9 GW were contracted, with 2 GW going to orders and 7 GW to slot reservation agreements (SRAs), plus conversions from prior SRAs. CEO Scott Strazik then explained the discrepancy by highlighting the order mix: the first half of the year was weighted toward simple-cycle orders, while the second half will feature substantially more combined-cycle orders, which carry a much higher dollar value per gigawatt.
On behalf of Joe Ritchie from Goldman Sachs, Rick Shrivastav asked about the drivers behind the industrial growth outlook, pricing strategies for list prices and A&D contract renewals, and the normalization status of the industrial backlog compared to pre-pandemic levels.
An executive detailed strength in mining, food & beverage, and warehousing, with oil & gas and semiconductor expected to recover later. CEO Mike Hartnett explained that new A&D contracts are being negotiated to reflect the 32% PPI increase since 2020. An executive also noted that the industrial backlog, particularly for Dodge, has returned to a more normalized, book-and-turn state.