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2 Construction & Mining Equipment Stocks to Watch Amid Industry Woes
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The Zacks Manufacturing - Construction and Mining industry has been bearing the brunt of the prolonged contraction in the manufacturing sector. Customer spending has been subdued due to the imposition of tariffs.
Despite this ongoing weakness, increased infrastructure investment in the United States and demand from the mining sector, driven by the energy transition trend, will buoy the industry. Terex Corporation (TEX - Free Report) and Hyster-Yale, Inc.HY are poised to benefit from these trends. These companies’ emphasis on introducing technologically advanced products, productivity and efficiency enhancements will aid growth.
Industry Description
The Zacks Manufacturing - Construction and Mining industry comprises companies that manufacture and sell construction, mining and utility equipment. They support customers using machinery in the construction of commercial, institutional and residential buildings, and infrastructure projects. Their equipment is also utilized in underground mining, drilling, mineral processing and surface mining to extract and haul copper, iron ore, coal, oil sands, aggregates, gold, and other minerals and ores. Their products are varied, including loaders, pavers, dozers, excavators, concrete mixer trucks, crushing, pulverizing and screening equipment, tractors and cranes. Industry participants support oil and gas, power generation, marine, rail and industrial applications through their reciprocating engines, generator sets, gas turbines and turbine-related services.
Trends Shaping the Future of the Manufacturing - Construction and Mining Industry
Prolonged Contraction in Manufacturing Activity Remains Worrisome: The Institute for Supply Management’s manufacturing index had been in contraction for 26 consecutive months (below 50) until December 2024. The index showed expansion in January and February, but this recovery was short-lived, with the index slipping into contraction again in March with a reading of 49%. The index has been in contraction for the past seven months and registered 49.1% in September. The New Orders Index returned to contraction territory in September, with a 48.9% reading. It had shown expansion in August with a 51.4% reading, after six consecutive months of contraction. The index has not delivered consistent growth since the end of its 24-month expansion streak in May 2022. Customer spending remains subdued due to the impact of tariffs.
Energy Transition Trend, Construction Spending to Aid Industry: The intensifying global focus on shifting from fossil fuels to zero emissions will require a large number of commodities, which, in turn, will support mining equipment demand in the years to come. The U.S. government's plans to increase investment in infrastructure construction, particularly in critical subsectors, such as transportation, water and sewerage, and telecommunications, should support demand in the coming years.
Higher Pricing, Cost Cuts to Boost Margins: The industry is facing input cost inflation, and transport and logistic costs. Industry players are focusing on pricing and other actions to improve productivity and efficiency. They are constantly implementing cost-reduction actions, which are likely to help sustain margins in this scenario. The companies are focused on streamlining their operations and realigning around high-growth key markets or customer segments to enhance their performances.
Investments in Digital Initiatives Act as a Key Catalyst: Industry participants are investing in digital initiatives like AI, cloud computing, advanced analytics and robotics. Digital transformation aids organizations in boosting productivity and increasing efficiency, reliability and safety, thereby enriching customer satisfaction. With the pressing need to cut carbon emissions, companies worldwide are relying more on autonomous machinery. Thus, players in the industry are stepping up their research and technological capabilities to bring products equipped with the latest technology into the market.
Zacks Industry Rank Indicates Weak Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim prospects in the near term. The Zacks Manufacturing - Construction and Mining industry, which is part of the broader Zacks Industrial Products Sector currently, carries a Zacks Industry Rank #200, which places it at the bottom 17% of 243 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. Since the beginning of this year, the industry's earnings estimates for 2025 have moved down 22%.
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 valuation picture.
Industry Versus Broader Market
The Manufacturing - Construction and Mining industry has outperformed the sector and the Zacks S&P 500 composite over the past year.
Over this period, the industry has grown 33.7% against the sector’s decline of 0.3%. The Zacks S&P 500 composite has moved up 16.5%.
One-Year Price Performance
Industry's Current Valuation
The trailing 12-month EV/EBITDA ratio, a commonly used multiple for valuing Manufacturing, Construction and Mining companies, shows that the industry is currently trading at 15.82X compared with the S&P 500’s 18.51X and the Industrial Products sector’s trailing 12-month EV/EBITDA of 24.36X. The charts below show this.
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Over the last five years, the industry traded as high as 15.82 and as low as 13.52, with a median of 14.46.
Two Manufacturing - Construction & Mining Stocks to Watch
Terex: The company recently inked a deal to sell its Terex Tower and Rough Terrain Cranes businesses. This is in sync with its focus to reduce cyclicality while accelerating growth and further leveraging synergies across its three business segments - Materials Processing, Aerials, and Environmental Solutions. Notably, the last segment includes the Environmental Solutions Group that was acquired in October 2024. This will enhance its financial profile, including revenues, free cash flow, EBITDA margin and earnings per share. Following the acquisition, waste and recycling now account for roughly 30% of Terex’s global revenues, offering steady growth and low cyclicality. Utilities contribute about 10% of revenues, which is expected to rise due to growing demand to modernize and strengthen power grids. Meanwhile, around 15% of the company’s business is tied to Infrastructure, a sector benefiting from substantial ongoing investment in the United States and globally. Collectively, these three markets generate more than half of Terex’s revenues and are considered highly resilient, with limited exposure to broader macroeconomic or geopolitical volatility compared with other segments. Terex shares have gained 3.9% in the past month.
The Zacks Consensus Estimate for Terex’s 2025 earnings has moved north 0.2% over the past 60 days. TEX has a trailing four-quarter earnings surprise of 22.3%, on average, and an estimated long-term earnings growth rate of 2%. The company currently carries a Zacks Rank #3 (Hold).
Hyster-Yale: Despite the ongoing weakness in the lift truck market, the company noted sales quoting activity remained steady in the second quarter of 2025. This indicates a resilient underlying demand opportunity. The company remains focused on proactive customer engagement, closely monitoring demand trends and ensuring that it will respond quickly when order levels pick up as customer confidence picks up and industry headwinds abate. The company is executing key strategies to drive substantial, longer-term profitable growth, such as product development and process improvement efforts. In the meantime, actions to reduce costs, improve productivity and deliver high-quality, highly customizable products should enable the company to be more profitable in all phases of the business cycle. Hyster-Yale continues to focus on cash generation and follows a disciplined capital allocation framework to reduce leverage, make strategic investments to support profitable business growth and generate strong returns for its shareholders. HY shares have gained 3% in the past month.
The Zacks Consensus Estimate for Hyster-Yales’ 2025 earnings has been unchanged over the past 60 days. HY currently has a Zacks Rank of 3.
Price & Consensus: HY
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2 Construction & Mining Equipment Stocks to Watch Amid Industry Woes
The Zacks Manufacturing - Construction and Mining industry has been bearing the brunt of the prolonged contraction in the manufacturing sector. Customer spending has been subdued due to the imposition of tariffs.
Despite this ongoing weakness, increased infrastructure investment in the United States and demand from the mining sector, driven by the energy transition trend, will buoy the industry. Terex Corporation (TEX - Free Report) and Hyster-Yale, Inc. HY are poised to benefit from these trends. These companies’ emphasis on introducing technologically advanced products, productivity and efficiency enhancements will aid growth.
Industry Description
The Zacks Manufacturing - Construction and Mining industry comprises companies that manufacture and sell construction, mining and utility equipment. They support customers using machinery in the construction of commercial, institutional and residential buildings, and infrastructure projects. Their equipment is also utilized in underground mining, drilling, mineral processing and surface mining to extract and haul copper, iron ore, coal, oil sands, aggregates, gold, and other minerals and ores. Their products are varied, including loaders, pavers, dozers, excavators, concrete mixer trucks, crushing, pulverizing and screening equipment, tractors and cranes. Industry participants support oil and gas, power generation, marine, rail and industrial applications through their reciprocating engines, generator sets, gas turbines and turbine-related services.
Trends Shaping the Future of the Manufacturing - Construction and Mining Industry
Prolonged Contraction in Manufacturing Activity Remains Worrisome: The Institute for Supply Management’s manufacturing index had been in contraction for 26 consecutive months (below 50) until December 2024. The index showed expansion in January and February, but this recovery was short-lived, with the index slipping into contraction again in March with a reading of 49%. The index has been in contraction for the past seven months and registered 49.1% in September. The New Orders Index returned to contraction territory in September, with a 48.9% reading. It had shown expansion in August with a 51.4% reading, after six consecutive months of contraction. The index has not delivered consistent growth since the end of its 24-month expansion streak in May 2022. Customer spending remains subdued due to the impact of tariffs.
Energy Transition Trend, Construction Spending to Aid Industry: The intensifying global focus on shifting from fossil fuels to zero emissions will require a large number of commodities, which, in turn, will support mining equipment demand in the years to come. The U.S. government's plans to increase investment in infrastructure construction, particularly in critical subsectors, such as transportation, water and sewerage, and telecommunications, should support demand in the coming years.
Higher Pricing, Cost Cuts to Boost Margins: The industry is facing input cost inflation, and transport and logistic costs. Industry players are focusing on pricing and other actions to improve productivity and efficiency. They are constantly implementing cost-reduction actions, which are likely to help sustain margins in this scenario. The companies are focused on streamlining their operations and realigning around high-growth key markets or customer segments to enhance their performances.
Investments in Digital Initiatives Act as a Key Catalyst: Industry participants are investing in digital initiatives like AI, cloud computing, advanced analytics and robotics. Digital transformation aids organizations in boosting productivity and increasing efficiency, reliability and safety, thereby enriching customer satisfaction. With the pressing need to cut carbon emissions, companies worldwide are relying more on autonomous machinery. Thus, players in the industry are stepping up their research and technological capabilities to bring products equipped with the latest technology into the market.
Zacks Industry Rank Indicates Weak Prospects
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim prospects in the near term. The Zacks Manufacturing - Construction and Mining industry, which is part of the broader Zacks Industrial Products Sector currently, carries a Zacks Industry Rank #200, which places it at the bottom 17% of 243 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. Since the beginning of this year, the industry's earnings estimates for 2025 have moved down 22%.
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 valuation picture.
Industry Versus Broader Market
The Manufacturing - Construction and Mining industry has outperformed the sector and the Zacks S&P 500 composite over the past year.
Over this period, the industry has grown 33.7% against the sector’s decline of 0.3%. The Zacks S&P 500 composite has moved up 16.5%.
One-Year Price Performance
Industry's Current Valuation
The trailing 12-month EV/EBITDA ratio, a commonly used multiple for valuing Manufacturing, Construction and Mining companies, shows that the industry is currently trading at 15.82X compared with the S&P 500’s 18.51X and the Industrial Products sector’s trailing 12-month EV/EBITDA of 24.36X. The charts below show this.
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Over the last five years, the industry traded as high as 15.82 and as low as 13.52, with a median of 14.46.
Two Manufacturing - Construction & Mining Stocks to Watch
Terex: The company recently inked a deal to sell its Terex Tower and Rough Terrain Cranes businesses. This is in sync with its focus to reduce cyclicality while accelerating growth and further leveraging synergies across its three business segments - Materials Processing, Aerials, and Environmental Solutions. Notably, the last segment includes the Environmental Solutions Group that was acquired in October 2024. This will enhance its financial profile, including revenues, free cash flow, EBITDA margin and earnings per share. Following the acquisition, waste and recycling now account for roughly 30% of Terex’s global revenues, offering steady growth and low cyclicality. Utilities contribute about 10% of revenues, which is expected to rise due to growing demand to modernize and strengthen power grids. Meanwhile, around 15% of the company’s business is tied to Infrastructure, a sector benefiting from substantial ongoing investment in the United States and globally. Collectively, these three markets generate more than half of Terex’s revenues and are considered highly resilient, with limited exposure to broader macroeconomic or geopolitical volatility compared with other segments. Terex shares have gained 3.9% in the past month.
The Zacks Consensus Estimate for Terex’s 2025 earnings has moved north 0.2% over the past 60 days. TEX has a trailing four-quarter earnings surprise of 22.3%, on average, and an estimated long-term earnings growth rate of 2%. The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price & Consensus: TEX
Hyster-Yale: Despite the ongoing weakness in the lift truck market, the company noted sales quoting activity remained steady in the second quarter of 2025. This indicates a resilient underlying demand opportunity. The company remains focused on proactive customer engagement, closely monitoring demand trends and ensuring that it will respond quickly when order levels pick up as customer confidence picks up and industry headwinds abate. The company is executing key strategies to drive substantial, longer-term profitable growth, such as product development and process improvement efforts. In the meantime, actions to reduce costs, improve productivity and deliver high-quality, highly customizable products should enable the company to be more profitable in all phases of the business cycle. Hyster-Yale continues to focus on cash generation and follows a disciplined capital allocation framework to reduce leverage, make strategic investments to support profitable business growth and generate strong returns for its shareholders. HY shares have gained 3% in the past month.
The Zacks Consensus Estimate for Hyster-Yales’ 2025 earnings has been unchanged over the past 60 days. HY currently has a Zacks Rank of 3.
Price & Consensus: HY