Pre-earnings brief
Reports
Wed, Oct 22, 2008
Est. EPS
—
Est. revenue
—
Implied move
±7.6%
EPS beat rate
25%
Graco Inc. is a leading manufacturer of fluid handling systems and products, primarily serving industries such as construction, automotive, and manufacturing. With a market cap of $13 billion, the company plays a crucial role in the industrial machinery sector, focusing on efficiency and innovation in fluid management solutions.
Last quarter
In Q2 2026, Graco reported an EPS of $0.91, exceeding expectations of $0.81, marking a positive surprise of over 12%. However, revenue figures were not disclosed, leaving some uncertainty about overall performance.
EPS beat streak
1Q
EPS beat rate
25%
Avg EPS surprise
-3.12%
Avg 1-day reaction
-0.55%
Investors are cautiously optimistic ahead of Graco's Q3 earnings, especially after the positive surprise last quarter. However, the lack of guidance may lead to uncertainty in expectations.
Bull case
If Graco continues to show strong EPS growth and manages to increase its revenue significantly, it could indicate robust demand for its products, leading to a positive market reaction.
Bear case
Conversely, if the company fails to meet expectations or shows signs of declining demand, it could lead to a negative reaction from investors, especially given the recent mixed earnings history.
The print will turn on these.
Q1
What will the EPS be for Q3-2026?
Given the recent positive surprise in EPS, the market will closely watch this figure to gauge ongoing profitability.
Q2
How is revenue trending in key markets?
Understanding revenue trends will provide insights into demand for Graco's products and overall business health.
—
Est. EPS
—
Est. Rev
—
Impl. Move
—
Why consensus could be wrong
The Street may be underestimating Graco's ability to leverage its recent EPS surprise into sustained revenue growth, especially in key markets where demand remains strong.
Supporting evidence
The recent EPS surprise suggests underlying strength that may not be fully reflected in current revenue expectations.
Options pricing indicates a significant move, suggesting that market sentiment is more uncertain than the consensus view.
Key risk
If revenue growth exceeds expectations, it could invalidate the cautious outlook currently held by analysts.
Pre-commit to what would confirm each case.
The market is debating whether Graco can sustain its recent earnings momentum amid mixed historical performance.
Bull confirmed if
An EPS of $0.95 or higher would confirm strong profitability and growth prospects.
Bear confirmed if
An EPS below $0.80 would raise concerns about declining demand and profitability.
What the market is pricing for the move.
Implied Move
±5.28%
Historical Avg
±0.9%
The options market is pricing in a significant move of over 5%, indicating uncertainty and potential volatility around the earnings report.
Options are pricing ±7.6% while GGG has averaged ±0.9% over the last 8 prints — setup is pricing rich.
ATM IV
0.5%
30d HV
15.7%
Cross-company pattern from 30 similar setups.
Prior-quarter beat + options rich in Industrials
Fade rate: 10 of 30 (33%)
This setup has occurred 30 times across Industrials in the last 2 years. 20 of 30 (67%) held or extended their move within 5 days — this setup typically holds direction. The average absolute 1-day move is 4.2%, with a raw directional average of -1.8% (modestly negative historical bias).
Likely market behavior by outcome. Not investment advice.
Beat & raise
If Graco beats expectations, history suggests a potential stock increase of around +0.51%, confirming positive growth sentiment.
In line / cautious
If results are in line but cautious commentary is provided, the stock may react moderately, reflecting uncertainty.
Miss
Should the company miss expectations, history suggests a potential decline of around -0.90%, indicating investor disappointment.
The lines on the call that would change the story.