APi Group's (APG) fiscal 2026 upside to be driven by solid backlog and tailwinds from data center buildouts, and accelerated permitting, RBC Capital Markets said in a Friday research report.

The brokerage said it expects accretive bolt-on acquisitions in 2026, as well as pricing improvements, disciplined project selection, and technology investments supported by favorable market trends to drive revenue growth and margin expansion. Additional margin drivers include lower material and labor cost pressures and procurement optimization.

For Q4, RBC said it expects adjusted EPS of $0.43 on revenue of $2.09 billion. The brokerage guided for fiscal 2026 adjusted EPS of $1.60 on revenue of $8.45 billion.

The company is aiming for adjusted earnings before interest, taxes, depreciation, and amortization margins of over 16% through operational efficiencies and a focus on the inspection, service, and monitoring segment, with more than 60% of revenue expected to come from this segment by fiscal 2028, analysts wrote.

The brokerage said it reiterated its outperform rating on the stock and price target of $45 per share.

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