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4 Manufacturing Electronics Stocks to Consider on Promising Industry Trends
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The Zacks Manufacturing - Electronics industry is well-positioned to benefit from stable demand across the electronic services end market, growing adoption of advanced manufacturing technologies and product innovation efforts. A surge in e-commerce activities is also likely to aid the industry’s growth.
However, a slowdown in the manufacturing sector and supply-chain issues have been weighing on the performance of some industry participants. Eaton Corporation plc (ETN - Free Report) , Emerson Electric Co. (EMR - Free Report) , Franklin Electric Co., Inc. (FELE - Free Report) and Powell Industries, Inc. (POWL - Free Report) are a few industry participants that are expected to capitalize on the opportunities.
Industry Description
The Zacks Manufacturing-Electronics industry comprises companies that manufacture electronic products like battery chargers, battery accessories, outdoor cabinet enclosures, power transmission products, electrical motion controls and motive power devices. Some industry players also provide water-treatment products, engineered flow components, process equipment and turn-key systems. These companies offer state-of-the-art customer support and after-market services to end users. The firms are increasing investments in developing innovative technologies, boosting customer and employee experience, and supply-chain modernization programs. The manufacturing electronic companies sell products and services in various end markets, including robotics, semiconductor, defense, aerospace, medical equipment and satellite communications.
3 Manufacturing Electronics Industry Trends in Focus
Softness in the Manufacturing Sector: Persistent weakness in the manufacturing sector has been denting the demand in the industry. After witnessing expansion in economic activities for the second consecutive month in February 2025, the manufacturing sector contracted for seven successive months in September. Per the Institute for Supply Management’s (ISM) report, the Manufacturing Purchasing Manager’s Index touched 49.1% in September. A figure less than 50% indicates a contraction in manufacturing activity. Also, the New Orders Index contracted, registering 48.9% in the same month. In addition, supply-chain disruptions, especially related to the availability of electrical and electronic components, remain a concern for industry participants of late. This is evident from the latest ISM report’s Supplier Deliveries Index, which reflected slower deliveries for the second consecutive month in September.
Strength in the Electronics Services Market: Despite a slowdown in manufacturing activities, demand across key end markets has been stable. Electronics manufacturers are steadily benefiting from the higher adoption of advanced manufacturing technologies and processes by original equipment manufacturers. The requirement for integrating advanced electronic components into machinery and electronic devices has been supporting the electronics manufacturing services market. In addition, a few industry players with wide exposure to the booming medical and life science markets are witnessing a positive momentum across their businesses due to sturdy demand for their products and solutions. A surge in the e-commerce business has also been boosting several industry participants’ prospects.
Technological Advancement Benefits: With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. With digitization, businesses are gaining a detailed insight into their operational performances, demand cycles, delivery status and supply-chain issues. This, in turn, is helping them bolster their competitiveness in the market with enhanced operational productivity, product quality and lower costs.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Manufacturing – Electronics industry, housed within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #84. This rank places it in the top 35% of 243 Zacks industries.
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. 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.
The industry’s positioning in the top 50% of the Zacks-Ranked industries is a result of the solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are putting more faith in this group's earnings growth potential. The industry’s earnings estimates for 2025 have inched up 0.1% over the past year.
Given the strong near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. However, it is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Outperforms Sector & Underperforms S&P 500
The Zacks Manufacturing – Electronics industry has outperformed the broader sector and underperformed the Zacks S&P 500 composite index over the past year. Over this period, the industry has grown 8.9% compared with the sector’s rise of 1.6% and the S&P 500 Index’s increase of 17.5%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month Price-to-Earnings (P/E), which is a commonly used multiple for valuing manufacturing stocks, the industry is currently trading at 22.44X compared with the S&P 500’s 23.39X. It is above the sector’s P/E ratio of 19.75X.
Over the past five years, the industry has traded as high as 25.51X, as low as 14.65X and at the median of 21.07X, as the chart below shows.
Price-to-Earnings Ratio vs SP500
Price-to-Earnings Ratio vs Sector
4 Manufacturing Electronics Stocks to Keep a Tab on
Franklin Electric: Based in Fort Wayne, IN, Franklin Electric is engaged in providing water and fuel pumping systems to the industrial and petroleum equipment distributors, oil and utility companies and original equipment manufacturers. FELE is well-positioned to benefit from solid momentum in the Water Systems segment, driven by an increase in demand for large dewatering equipment and water treatment products. Also, higher demand for fuel management systems and pumping systems within the Energy Systems segment bodes well for it.
Powell: Headquartered in Houston, TX, Powell engages in manufacturing and supplying custom-engineered equipment and systems that are used for distributing, controlling and monitoring the flow of electrical energy. The company is benefiting from strength in the oil and gas, and electric utility markets. Also, a strong pipeline of projects within the LNG market and its growing presence across the data center and electric utility sector bode well for POWL.
Shares of this Zacks Rank #2 company have soared 34.4% in the past year. The Zacks Consensus Estimate for Powell’s fiscal 2025 (ended September 2025) earnings has remained steady in the past 60 days.
Price and Consensus: POWL
Emerson: Based in St. Louis, MO, this global engineering and technology company offers a wide range of products and services to customers in the consumer, commercial and industrial markets. Emerson is witnessing solid momentum in the Final Control business, driven by strength in the power end markets. Robust growth across the Americas and Asia, Middle East & Africa regions is buoying EMR’s Measurement & Analytical business.
Shares of this Zacks Rank #3 (Hold) company have gained 23.2% in the past year. The Zacks Consensus Estimate for Emerson’s fiscal 2025 (ended September 2025) earnings has increased a penny in the past 60 days.
Price and Consensus: EMR
Eaton: Headquartered in Dublin, Ireland, Eaton is a diversified power management company and a global technology leader in electrical components and systems. ETN is benefiting from rising demand from the new AI-data center and contributions from its organic assets. The company is also poised to benefit from the megatrends, including the reindustrialization process started across the globe.
This Zacks Rank #3 company’s shares have gained 8.1% in the past year. The Zacks Consensus Estimate for Eaton’s 2025 earnings has remained steady in the past 60 days.
Price and Consensus: ETN
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4 Manufacturing Electronics Stocks to Consider on Promising Industry Trends
The Zacks Manufacturing - Electronics industry is well-positioned to benefit from stable demand across the electronic services end market, growing adoption of advanced manufacturing technologies and product innovation efforts. A surge in e-commerce activities is also likely to aid the industry’s growth.
However, a slowdown in the manufacturing sector and supply-chain issues have been weighing on the performance of some industry participants. Eaton Corporation plc (ETN - Free Report) , Emerson Electric Co. (EMR - Free Report) , Franklin Electric Co., Inc. (FELE - Free Report) and Powell Industries, Inc. (POWL - Free Report) are a few industry participants that are expected to capitalize on the opportunities.
Industry Description
The Zacks Manufacturing-Electronics industry comprises companies that manufacture electronic products like battery chargers, battery accessories, outdoor cabinet enclosures, power transmission products, electrical motion controls and motive power devices. Some industry players also provide water-treatment products, engineered flow components, process equipment and turn-key systems. These companies offer state-of-the-art customer support and after-market services to end users. The firms are increasing investments in developing innovative technologies, boosting customer and employee experience, and supply-chain modernization programs. The manufacturing electronic companies sell products and services in various end markets, including robotics, semiconductor, defense, aerospace, medical equipment and satellite communications.
3 Manufacturing Electronics Industry Trends in Focus
Softness in the Manufacturing Sector: Persistent weakness in the manufacturing sector has been denting the demand in the industry. After witnessing expansion in economic activities for the second consecutive month in February 2025, the manufacturing sector contracted for seven successive months in September. Per the Institute for Supply Management’s (ISM) report, the Manufacturing Purchasing Manager’s Index touched 49.1% in September. A figure less than 50% indicates a contraction in manufacturing activity. Also, the New Orders Index contracted, registering 48.9% in the same month. In addition, supply-chain disruptions, especially related to the availability of electrical and electronic components, remain a concern for industry participants of late. This is evident from the latest ISM report’s Supplier Deliveries Index, which reflected slower deliveries for the second consecutive month in September.
Strength in the Electronics Services Market: Despite a slowdown in manufacturing activities, demand across key end markets has been stable. Electronics manufacturers are steadily benefiting from the higher adoption of advanced manufacturing technologies and processes by original equipment manufacturers. The requirement for integrating advanced electronic components into machinery and electronic devices has been supporting the electronics manufacturing services market. In addition, a few industry players with wide exposure to the booming medical and life science markets are witnessing a positive momentum across their businesses due to sturdy demand for their products and solutions. A surge in the e-commerce business has also been boosting several industry participants’ prospects.
Technological Advancement Benefits: With the gradual development of business models and cutting-edge technologies, several industry players have been banking on digitizing their business operations for a while now. With digitization, businesses are gaining a detailed insight into their operational performances, demand cycles, delivery status and supply-chain issues. This, in turn, is helping them bolster their competitiveness in the market with enhanced operational productivity, product quality and lower costs.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Manufacturing – Electronics industry, housed within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #84. This rank places it in the top 35% of 243 Zacks industries.
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. 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.
The industry’s positioning in the top 50% of the Zacks-Ranked industries is a result of the solid earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are putting more faith in this group's earnings growth potential. The industry’s earnings estimates for 2025 have inched up 0.1% over the past year.
Given the strong near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. However, it is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Outperforms Sector & Underperforms S&P 500
The Zacks Manufacturing – Electronics industry has outperformed the broader sector and underperformed the Zacks S&P 500 composite index over the past year. Over this period, the industry has grown 8.9% compared with the sector’s rise of 1.6% and the S&P 500 Index’s increase of 17.5%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month Price-to-Earnings (P/E), which is a commonly used multiple for valuing manufacturing stocks, the industry is currently trading at 22.44X compared with the S&P 500’s 23.39X. It is above the sector’s P/E ratio of 19.75X.
Over the past five years, the industry has traded as high as 25.51X, as low as 14.65X and at the median of 21.07X, as the chart below shows.
Price-to-Earnings Ratio vs SP500
Price-to-Earnings Ratio vs Sector
4 Manufacturing Electronics Stocks to Keep a Tab on
Franklin Electric: Based in Fort Wayne, IN, Franklin Electric is engaged in providing water and fuel pumping systems to the industrial and petroleum equipment distributors, oil and utility companies and original equipment manufacturers. FELE is well-positioned to benefit from solid momentum in the Water Systems segment, driven by an increase in demand for large dewatering equipment and water treatment products. Also, higher demand for fuel management systems and pumping systems within the Energy Systems segment bodes well for it.
In the past 60 days, estimates for this Zacks Rank #2 (Buy) company’s earnings have increased 0.5% for 2025. Although shares of Franklin Electric lost 2.3% in the past year, they rose 11.3% in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: FELE
Powell: Headquartered in Houston, TX, Powell engages in manufacturing and supplying custom-engineered equipment and systems that are used for distributing, controlling and monitoring the flow of electrical energy. The company is benefiting from strength in the oil and gas, and electric utility markets. Also, a strong pipeline of projects within the LNG market and its growing presence across the data center and electric utility sector bode well for POWL.
Shares of this Zacks Rank #2 company have soared 34.4% in the past year. The Zacks Consensus Estimate for Powell’s fiscal 2025 (ended September 2025) earnings has remained steady in the past 60 days.
Price and Consensus: POWL
Emerson: Based in St. Louis, MO, this global engineering and technology company offers a wide range of products and services to customers in the consumer, commercial and industrial markets. Emerson is witnessing solid momentum in the Final Control business, driven by strength in the power end markets. Robust growth across the Americas and Asia, Middle East & Africa regions is buoying EMR’s Measurement & Analytical business.
Shares of this Zacks Rank #3 (Hold) company have gained 23.2% in the past year. The Zacks Consensus Estimate for Emerson’s fiscal 2025 (ended September 2025) earnings has increased a penny in the past 60 days.
Price and Consensus: EMR
Eaton: Headquartered in Dublin, Ireland, Eaton is a diversified power management company and a global technology leader in electrical components and systems. ETN is benefiting from rising demand from the new AI-data center and contributions from its organic assets. The company is also poised to benefit from the megatrends, including the reindustrialization process started across the globe.
This Zacks Rank #3 company’s shares have gained 8.1% in the past year. The Zacks Consensus Estimate for Eaton’s 2025 earnings has remained steady in the past 60 days.
Price and Consensus: ETN