Zacks Industry Outlook Lincoln Electric, Core & Main, Stanley Black & Decker and Enerpac Tool

Core Viewpoint - The Zacks Manufacturing-Tools & Related Products industry is facing challenges due to softness in the manufacturing sector, a slowdown in new orders, and ongoing supply-chain issues, compounded by a shortage of skilled labor in the U.S. [1][5][6] Industry Overview - The industry includes companies that develop and distribute various tools such as hand and mechanics tools, hydraulic tools, and engineered fastening systems, among others [3] - Advanced tools are utilized across multiple sectors including industrial, commercial, oil & gas, mining, and automotive [4] Major Trends - Weakness in the Manufacturing Sector: The Manufacturing Purchasing Manager's Index fell to 49% in March, indicating contraction, with the New Orders Index at 45.2% [5] - Rising Costs: Input cost inflation and supply-chain issues are negatively impacting profitability, with the Supplier Deliveries Index showing slower deliveries for four consecutive months [6] - Investments in Product Development: Companies are focusing on innovation and product upgrades, although this often leads to highly leveraged balance sheets [7] Industry Performance - The Zacks Manufacturing-Tools & Related Products industry ranks 162, placing it in the bottom 34% of 247 Zacks industries, indicating weak near-term prospects [8][9] - The industry's earnings estimates for 2025 have decreased by 11.1% over the past year, reflecting analysts' diminishing confidence in earnings growth [10] - The industry has underperformed both the sector and the S&P 500, declining 20.5% over the past year compared to the S&P 500's growth of 6.9% [12] Current Valuation - The industry is trading at a forward P/E ratio of 15.81X, below the S&P 500's 20.05X and the sector's 16.83X [13] Notable Companies - Stanley Black & Decker, Inc.: Expected growth driven by strong performance in the Tools & Outdoor segment and cost-reduction efforts [14][15] - Lincoln Electric Holdings, Inc.: Benefiting from cost management and product launches in automation solutions [15][16] - Core & Main, Inc.: Increased demand for infrastructure products and recent acquisitions are positive for growth [17][18] - Enerpac Tool Group Corp.: Solid momentum in the Industrial Tools & Services segment supports its growth [20][21]