Concentra Group (CON) is positioned to benefit from a potential pickup in manufacturing and construction activity, particularly in markets benefiting from AI data center development, as management expressed cautious optimism about early signs of a pickup, RBC Capital Markets said in a Monday note.

The company delivered strong Q2 results and raised its 2026 guidance, while management pointed to a potential increase in manufacturing and construction activity, particularly in markets involved in AI data center development.

The company is "cautiously optimistic" on early indicators of a rise in construction activity, particularly in Texas and Oklahoma where there is significant data center development, RBC said.

Workers' compensation visits are tracking at some of the highest levels in two decades, and the company noted that large projects typically bring in further infrastructure and employment within the next couple of years, leading to an opportunity for volumes.

Concentra has established business relationships with large construction companies involved in the projects, and it believes it is poised to capture incremental volume as the projects progress, according to the note.

Further, Concentra has attained its delevering target earlier than expected, which sets it up for continued acquisitions and expansion.

RBC reiterated its outperform rating on the company's stock and raised its price target to $42 from $36.

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