Investing.com -- Jefferies sees improving prospects across European midcaps heading into the second half of 2026, pointing to stronger order intake, improving momentum and greater earnings visibility after a broadly positive second-quarter reporting season.
Positive Q2 surprises have supported material estimate increases across much of the coverage universe, prompting a reshuffle of DACH midcap preferences. Redcare Pharmacy is now preferred at current valuation levels, with Bilfinger and Inficon remaining top picks for the second half.
Inficon has shown a strong recovery in operational performance this year after tariff uncertainty, foreign-exchange headwinds and weakness in semiconductors. Improving industry conditions could create scope for further growth, with the durability of the company's financial targets a key focus.
Systemair also stands out after adjusted EBIT rose 13% year-on-year and beat consensus by 4% in its fiscal first quarter. Broad-based growth and rising exposure to data-centre cooling add to the investment case, with AI-related spending supporting demand.
Volex carries a Buy rating after delivering growth well ahead of expectations and raising full-year guidance only four months into its financial year. Forecasts through fiscal 2029 were raised on the back of a stronger growth and earnings trajectory.
Acerinox remains another preferred name, with its price target raised to €22. The case rests on a more U.S.-focused earnings mix, capacity expansion and improving conditions in Europe.
Everplay offers a different type of upside through valuation. Strong engagement around upcoming releases supports the expected second-half earnings ramp, with around 80% of forecast fiscal 2026 EBITDA weighted to H2. The shares trade at 6.5 times expected EBITDA, well below a historical average in the mid-teens.
The investment firm has also become more selective after strong share-price moves. DocMorris was downgraded to Hold after rising more than 80% this year, while Nagarro was also cut to Hold as Persistent's €81-per-share takeover offer is expected to proceed.
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