Roper Technologies (ROP) is expected to face headwinds in 2026 due to weaker organic growth guidance, unresolved AI risks and softness in select portfolio units, RBC Capital Markets said.

The company posted a modest Q4 operating beat, but shares fell as investors focused on 2026 guidance calling for 5% to 6% organic growth. This guidance captures RBC's estimate at the low end but falls short of consensus.

AI disruption remains an unresolved concern across Roper's operations and could weigh on results into 2027. Deltek, Neptune, and Procare, which together account for 26% of sales, are expected to remain weak. The broader portfolio may see modest improvement, the investment firm said in a Tuesday note.

Delayed deals at Deltek, caused by a prolonged US government shutdown, drove a drop in Q4 non-recurring revenue. Management is not assuming near-term recovery in the GovCon market.

Neptune smart water meter sales are expected to decline in 2026 as backlogs normalize. Growth is projected to resume in 2027, which could have read-across to sector peers.

Roper's $6 billion capital capacity provides room for M&A and buybacks but RBC said this is unlikely to offset near-term investor concerns.

RBC maintained its sector perform rating and lowered its price target to $398 from $539.

Shares of Roper were down nearly 3% in recent trading.

Price: 359.48, Change: -9.79, Percent Change: -2.65