TRG | The Bottom Line – 7/31

We are essentially at the midway point of earnings season. Of course, cloud capex is the theme of all themes and draws a lot of attention. But there are other things happening in the world. For instance, demand for office space is soaring. CBRE stated that U.S. office leasing grew 29%, driven by gateway markets. Yes, you read that right, office leasing growing 29%. To connect the dots – HNI had a strong quarter and seeing that tailwind in their demand profile – legacy Workplace orders grew MSD in the quarter and Steelcase orders grew more. HNI’s internal pre-sales KPIs are quite robust. Switching gears, Granite saw CAP grow 22% YOY to $7.4B, hitting another record high. This growth is fueled from an array of verticals, including data centers. This enabled Granite to raise their sales outlook for each of 2026 and 2027. In relation to our fair value ranges, HNI has 60%+ upside, while Granite has ~50% upside. These are two examples of TRG’s continuous effort to search out and spotlight non-consensus themes and stocks that benefit.

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