Cognex (CGNX) in Focus as Truist Maps a More Selective 2026 Industrials Outlook

Cognex Corporation (NASDAQ:CGNX) is included among the 15 Dividend Stocks with Low Payout Ratios and Strong Upside.

Cognex (CGNX) in Focus as Truist Maps a More Selective 2026 Industrials Outlook

On December 18, Truist lowered its price target on Cognex Corporation (NASDAQ:CGNX) to $42 from $45 and kept a Hold rating. The move came in a broader preview of machinery, infrastructure services, and multi-industry industrial names heading into 2026.

The firm said it still favors power-related markets, including transmission, distribution, and power generation tied to data centers and AI. At the same time, investors are starting to look for signs that demand may be peaking. Backlog growth is likely to be watched closely, especially as new capacity comes online and risks around hyperscalers remain in focus. Construction stands out as a brighter area. Channel destocking appears largely finished, and early signs of recovery are showing. Truist pointed to Deere guiding for Construction & Forestry growth of about 10% in 2026. North American truck orders remain weak, but they appear to be at a cyclical low. The firm expects improvement through 2026 as EPA 2027 approaches and pre-buy activity begins.

Cognex Corporation (NASDAQ:CGNX)’s own results show improving momentum. In the third quarter of 2025, revenue reached $277 million, up 18% from a year earlier. Operating margin came in at 20.9%, while adjusted EBITDA margin rose to 24.9%. That marked a 730 basis point improvement year over year and the highest level since the second quarter of 2023.

Net income per diluted share was $0.10. Adjusted diluted EPS reached $0.33, up 69% from last year. That was the fifth straight quarter of earnings growth. Cash generation also improved as operating cash flow totaled $87 million, compared with $56 million in the third quarter of 2024.

The company returned $37 million to shareholders during the quarter and more than 100% of free cash flow over the past twelve months. During the period, Cognex also launched its Solutions Experience, or SLX, product portfolio in Logistics. The platform brings AI-enabled vision applications to a logistics market that continues to grow.

Cognex Corporation (NASDAQ:CGNX) is a leading provider of machine vision systems, software, sensors, and industrial barcode readers used in manufacturing and automation worldwide.

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Disclosure: None.