We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Class 8 truck industry is showing signs of recovery.
EML and SYPR have Class 8 exposure.
We are seeing evidence of some recovery in the highly cyclical Class 8 truck industry. The recovery is benefitting from pre-buying of nitrogen oxide compliant engines due to new EPA regulations in 2027.
FTR Transportation reports that August class 8 truck orders increased 42% YOY. While the duration of the momentum is a key question, generally positive cash flows for carriers combined with deferred equipment purchases could bode well for continued growth into 2027.
Here we highlight 2 microcaps in our research universe with Class 8 exposure.
We recently upgraded The Eastern Company (EML - Free Report) to Outperform based on backlog strength and the prospect of better margins on newer business.
Image Source: Zacks Investment Research
Two of the company’s business units manufacture truck mirror assemblies and mirror-camera systems. The recent strength of the industry (July and August) was not reflected in the latest quarter. In fact, Class 8 softness negatively impacted sales by about $5.7 m for the June quarter.
The Eastern Company (EML - Free Report) reported an overall company backlog increase of 45%.
Sypris Solutions Inc. (SYPR - Free Report) is the other microcap with Class 8 exposure. We remain on the sidelines with Sypris Solutions Inc. (SYPR - Free Report) as the electronics business continues to flag, although attractive end markets like space, aerospace, and defense are showing signs of strength.
Image Source: Zacks Investment Research
Margin pressure has also been acute, but the company noted recovery in the Class 8 market, where Sypris produces heavy-duty drivetrain components.
The monthly report on September Class 8 production will be a highly watched report as it will serve as a post-EPA order barometer of demand and provide more clarity into 2027.
View the Zacks #1 Rank List
Image: Bigstock
Class 8 Truck Recovery? 2 Stocks to Watch.
Key Takeaways
We are seeing evidence of some recovery in the highly cyclical Class 8 truck industry. The recovery is benefitting from pre-buying of nitrogen oxide compliant engines due to new EPA regulations in 2027.
FTR Transportation reports that August class 8 truck orders increased 42% YOY. While the duration of the momentum is a key question, generally positive cash flows for carriers combined with deferred equipment purchases could bode well for continued growth into 2027.
Here we highlight 2 microcaps in our research universe with Class 8 exposure.
We recently upgraded The Eastern Company (EML - Free Report) to Outperform based on backlog strength and the prospect of better margins on newer business.
Image Source: Zacks Investment Research
Two of the company’s business units manufacture truck mirror assemblies and mirror-camera systems. The recent strength of the industry (July and August) was not reflected in the latest quarter. In fact, Class 8 softness negatively impacted sales by about $5.7 m for the June quarter.
The Eastern Company (EML - Free Report) reported an overall company backlog increase of 45%.
Sypris Solutions Inc. (SYPR - Free Report) is the other microcap with Class 8 exposure. We remain on the sidelines with Sypris Solutions Inc. (SYPR - Free Report) as the electronics business continues to flag, although attractive end markets like space, aerospace, and defense are showing signs of strength.
Image Source: Zacks Investment Research
Margin pressure has also been acute, but the company noted recovery in the Class 8 market, where Sypris produces heavy-duty drivetrain components.
The monthly report on September Class 8 production will be a highly watched report as it will serve as a post-EPA order barometer of demand and provide more clarity into 2027.