APi Group (APG) is expected to report Q2 results largely in-line with Wall Street estimates on "robust demand" in data centers and other end markets, RBC Capital Markets said in a report emailed Wednesday.

The firm forecasts Q2 revenue of about $2.21 billion, up 11.4% year over year, including organic growth of about 8.2%, despite a "modest" sequential slowdown due to tougher comparables in the Specialty segment.

Demand from data centers, advanced manufacturing, healthcare, higher education and critical infrastructure should continue to support growth, while "pricing flexibility" is expected to offset higher input costs, the report said.

While "near-term margin expansion" is expected to remain constrained by product mix, the firm said margins should begin accelerating in Q3 and continue improving through 2027 and 2028 as the company benefits from higher-margin service revenue, "procurement efficiencies" and back-office consolidation initiatives, according to the report.

RBC has an outperform rating on APi Group and a price target of $53.

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