VRT 3Q26: Beat-and-raise quarter? That's an understatement!

This quarter was a massive beat for Vertiv, with clearly a huge amount of latent demand the company is able to tap into. The back-half ramp which earlier worried some investors should clearly not be as much of a concern, and we would expect a positive read-across for the broader cooling/electrical space, especially after last quarter's de-rating. Revenue rose 61% YoY to $4.3bn, beating estimates by 15%, while organic growth accelerated to 55% versus the 35% consensus. Adjusted EBIT rose 83% YoY to $1.1bn, driving 90bps of margin expansion, and adjusted EPS of $2.21 beat by 22%. Performance was broad-based, with Americas, APAC and EMEA all delivering revenue and profit beats, led by 67% organic growth in the Americas. Vertiv raised FY26 guidance to net sales of approximately $14.65bn (from $13.8-14.2bn), organic growth of approximately 38% (from 30-32%) and adjusted diluted EPS of approximately $7.15 (from $6.65-6.75). We value Vertiv at 27x NTM+1 EBITDA of $5.3bn to reach our $368 targ