Zacks Industry Outlook Highlights TriMas and Northwest Pipe

For Immediate ReleaseChicago, IL – February 19, 2025 – Today, Zacks Equity Research discusses TriMas Corp. TRS and Northwest Pipe Co. NWPX.Industry: Metal FabricationLink: https://www.zacks.com/commentary/2417458/2-metal-fabrication-stocks-to-watch-despite-ongoing-industry-weaknessThe Zacks Metal Products - Procurement and Fabrication industry continues to face challenges due to prolonged contraction in manufacturing activity. Rising input costs, labor shortages and freight expenses further strain the profitability of the industry. The imposition of tariffs is anticipated to disrupt supply chains and drive costs even further.Amid these conditions, industry players like TriMas Corp. and Northwest Pipe Co. are poised to benefit from their proactive cost-management actions and efforts to improve efficiency. Their continuous investments in automation, product innovation and acquisitions are anticipated to contribute to their growth.About the IndustryThe Zacks Metal Products - Procurement and Fabrication industry primarily comprises metal processing and fabrication service providers that transform metals into metal parts, machinery or components used across various other industries. Their processes include forging, stamping, bending, forming and machining, which are used in shaping individual pieces of metal, and welding and assembling to join parts.The companies either use one of these processes or a combination of all. The most common raw materials utilized by metal fabrication companies include plate metal, formed or expanded metal, tube stock, welding wire or rod and casting. The industry players serve an array of markets, including construction, mining, aerospace and defense, automotive, agriculture, oil and gas, electronics/electrical components, industrial equipment and general consumer.Trends Shaping the Future of the Metal Products - Procurement and Fabrication IndustryProlonged Contraction and Tariff Risks Cloud Metal Products Outlook: Per the Fed’s latest industrial production report, the aggregate production of fabricated metal products in the United States was down 1.3% in the 12 months ended January 2025. The Institute for Supply Management’s manufacturing index had been in contraction for 26 consecutive months until it saw a modest increase to 50.9% in January 2025.However, the fabricated metal products industry remained one of the eight industries still in contraction. The industry meanwhile reported growth in new orders in January. However, sustained growth remains uncertain. The imposition of tariffs by President Trump could disrupt supply chains and derail this recent recovery in U.S. manufacturing.High Costs & Tariff Concerns Ail the Industry: The industry has been experiencing significant inflation levels, including higher prices for labor, freight and fuel. The companies are witnessing labor shortages for some positions and incurring steep labor costs to meet demand. The industry players are focusing on pricing actions, cost-cutting measures, efforts to improve productivity and efficiency, and the diversification of the supplier bases to mitigate some headwinds. Also, the imposition of tariffs is anticipated to lead to higher costs for the industry.Automation & End-Market Growth to Act as Catalysts: The industry’s customer-focused approach to provide cost-effective technical solutions, automation to increase efficiency and lower labor costs, and the development of innovative products will drive growth in the days ahead. Improvements in end-use sectors, such as manufacturing, aerospace and automotive, are anticipated to benefit the metal fabrication market over the next few years. Developing countries hold promise due to rapid industrialization. This, in turn, is likely to create demand.Zacks Industry Rank Indicates Dim ProspectsThe group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates tepid prospects in the near term. The Zacks Metal Products - Procurement and Fabrication industry, a nine-stock group within the broader Industrial Products sector, currently carries a Zacks Industry Rank #221, which places it in the bottom 11% of the 252 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. The industry's earnings estimates for 2025 have moved down 4% since the beginning of this year.Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock-market performance and the valuation picture.Industry vs. Broader MarketThe Zacks Metal Products - Procurement and Fabrication industry has outperformed its sector and Zacks S&P 500 composite over the past year.Over this period, the industry has grown 34.4% compared with the sector’s increase of 6.4% and the Zacks S&P 500 composite’s rise of 23.3%.Industry's Current ValuationBased on the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing the Metal Products - Procurement and Fabrication companies, the industry is currently trading at 18.61 compared with the S&P 500’s 13.96 and the Industrial Products sector’s forward 12-month EV/EBITDA of 18.61.Over the last five years, the industry traded as high as 31.97 and as low as 4.20, with the median at 9.76.2 Metal Products - Procurement and Fabrication Stocks to Keep Tabs onNorthwest Pipe: The company recently received a U.S. Patent for the InfraShield Joint System, an innovative solution to strengthen the resilience of steel pipelines. It has been implementing cost-reduction techniques and actions to enhance operating efficiency, which will support margins. Rising demand for developed water sources and the pressing need to upgrade, repair and replace the aging U.S water and wastewater systems present significant opportunities for NWPX.The company continues strengthening its liquidity by repaying debt and generating strong cash flow from operations, supported by effective working capital management. Northwest Pipe’s growth strategy has been focused on improving the Precast business to reduce the cyclicality of the Steel Pressure Pipe operations and increasing overall margins and cash flow. The company also continues to look for growth opportunities through expansion or acquisitions.The Zacks Consensus Estimate for Vancouver, WA-based Northwest Pipe’s fiscal 2025 earnings has remained unchanged over the past 60 days. The estimate indicates growth of 5.1% from the year-earlier number. NWPX has a trailing four-quarter earnings surprise of 32.5%, on average. The company currently carries a Zacks Rank #3 (Hold) and has a long-term estimated earnings growth of 5%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.TriMas: The company’s packaging segment is benefiting from the gradual recovery in the consumer goods and industrial markets, and improving order intake. The Aerospace segment is poised for growth on solid backlog, order intake and operational excellence initiatives. The company recently closed the acquisition of Germany-based GMT Aerospace, a manufacturer of tie rods used in a range of structural aerospace applications.This move will add the first manufacturing location in Europe for the Aerospace segment. This is in sync with TriMas’ strategy to accelerate growth through acquisitions, particularly in its Packaging and Aerospace platforms. The company has a strong pipeline of products and process innovation, which will sustain long-term growth.The Zacks Consensus Estimate for Bloomfield Hills, MI-based TriMas’ fiscal 2025 earnings indicates year-over-year growth of 20.7%. The estimate has moved up 2% over the past 60 days. The company currently carries a Zacks Rank of 3.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. 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Click to get this free report Northwest Pipe Company (NWPX): Free Stock Analysis Report TriMas Corporation (TRS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks