APi Group's (APG) strong backdrop for project demand can drive estimates toward the top end of its guidance range, while expectations remain relatively low given the stock's underperformance versus the S&P and Q1 earnings setting up the latter half of the year more favorably, Truist said in a report Monday.

The company is scheduled to report Q2 results Thursday.

Most investors were expecting Safety segment organic growth of about 6.5% versus the reported 5.4%, the firm noted. The deceleration was driven by difficult comps and some intentional contract shedding in the International segment, according to the note.

While there are tougher comps for the rest of the year, the midpoint of APi Group's guidance implies nearly 0% growth in its Specialty segment for H2, which seems to be conservative, the note added.

The brokerage sees organic growth of more than 5%, with potential to reach nearly 6% in H2, amid a supportive background for project demand.

Truist kept a buy rating on APi Group with an unchanged price target of $55.

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