Robots are being widely used in the manufacturing space for over decades now, especially in assembly lines and material handling in automotive factories. Hardware like a robotic arm, end effector, or end of arm tool (EOAT), welding guns, and grippers are in use in most of the manufacturing hubs. However, the lack of labor, especially in developed countries, strict labor laws, and the coronavirus pandemic have pushed businesses to adopt robots on the factory floor.
In the past five years, robots have witnessed demand in end-use sectors like automotive, defense, medical, space, and entertainment. Industrial robots like linear bots (cartesian and gantry robots), SCARA robots (Selective Compliance Assembly Robot Arm), articulated robots, parallel robots (delta), and cylindrical robots, find application in the automotive, food and beverage, and electronics industries.
Per Mordor Intelligence’s research
report the global robotics market was valued at $27. 73 billion in 2020 and is expected to reach $74.1 billion by 2026, at a CAGR of 17.45%. Labor shortage and up-gradation of traditional industries are primarily the factors driving the market.
The decline in cost of installation is accelerating the shift toward lights-out manufacturing (fully automated and require no human presence on-site), which is being supported by artificial intelligence (AI). AI’s capability in managing critical tools powers the lights-out toolkit, with minimal human intervention in running day-to-day operations. Moreover, with rising concerns regarding sustainability and zero-carbon emission, these robots can help in lowering overall carbon footprint and boosting the company’s ESG scores.
This transformation into a fully automated factory floor will require a digital-first approach and a highly skilled human workforce. Concepts like micro-factories (that require a smaller workforce and less space, energy and materials), grid manufacturing (computational advancements driving automation allowing mass customization) and Industrial Internet of Things (IIoT) are hogging the limelight. Hence, emerging trends like robotics-as-a-service (RaaS) are poised to grow. RaaS offers robots on demand, for short-term need or companies wanting to try before they buy, without a long-term investment. In fact, the application of RaaS could reduce overall manufacturing costs by 30%.
Many small and large manufacturers have already deployed collaborative robots (cobots), helping laborers on the factory floor, especially in material handling, machine tending, and bin-picking. Per a MarketsandMarkets
report, the cobot market is projected to rise from $1.2 billion in 2021 to reach $10.5 billion by 2027, at a CAGR of 43.4%. 4 Stocks to Keep an Eye on
Technological advancements, ability to optimize cost, enhanced productivity and efficiency are key factors that boost growth of robots, despite high initial investments and high-tech research and development costs. With a wide scope of adoption and application in the manufacturing space, the robotics market is poised to grow. Hence, we have shortlisted four stocks that investors can keep an eye on.
Seiko Epson Corporation’s ( SEKEY Quick Quote SEKEY - Free Report) Industrial Products segment offers factory automation products, industrial robots, IC handlers, automotive, and industrial equipment applications; and sensing devices. EPSON Robots has been a leader in the automation industry for small parts assembly products and has introduced several industry firsts, including compact SCARA robots, PC-based controls and more.
The company belonging to the Zacks
Office Automation and Equipment industry has a projected earnings growth of 34.2% for the current year. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 7.8% upward over the past 60 days. Epson sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here . ABB Ltd ( ABB Quick Quote ABB - Free Report) manufactures and sells electrification, industrial automation, and robotics and motion products. The company has a number of robotics innovations, starting from high-speed delta robots, for picking and packaging, to world's first truly collaborative industrial robot, YuMi.
The company’s expected earnings growth rate for the current year is 38.8% compared with the Zacks
Manufacturing - Electronics industry’s projected earnings growth of 22.5%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 7.1% upward over the past 60 days. ABB holds a Zacks Rank #2 (Buy). Fanuc Corporation ( FANUY Quick Quote FANUY - Free Report) provides a factory automation product, which includes servo motors, lasers, robots, compact machining centers, electric injection molding machines and more. It makes robot arms that are trained to pick items out of bins and can be used for tedious, time-consuming tasks like sorting bulk orders of parts.
The company’s expected earnings growth rate for the current year is 58.7% compared with the Zacks
Industrial Automation and Robotics industry’s projected earnings growth of 26%. The Zacks Consensus Estimate for Fanuc’s current-year earnings has been revised 17.7% upward over the past 60 days. The stock currently carries a Zacks Rank #3 (Hold). Rockwell Automation, Inc. ( ROK Quick Quote ROK - Free Report) provides industrial automation and digital transformation solutions. It offers RaaS and helps companies improve productivity by monitoring the health of key components and reducing unplanned downtime. The company belonging to the Zacks Industrial Automation and Robotics industry has a projected earnings growth of nearly 21% in the current year. The Zacks Consensus Estimate for this Zacks Rank #3 company’s current-year earnings has been revised 0.9% upward over the past 60 days.