Against this backdrop, industry players like ESAB Corporation ESAB and Century Aluminum CENX are poised to benefit from their proactive cost-management actions and efforts to improve efficiency. Their continuous investments in automation, product innovation and acquisitions are anticipated to contribute to their growth.
About the Industry
The Zacks Metal Products - Procurement and Fabrication industry primarily comprises metal processing and fabrication service providers that transform metals into metal parts, machinery or components used across various other industries. Their processes include forging, stamping, bending, forming and machining, which are used in shaping individual pieces of metal, and welding and assembling to join parts. The companies either use one of these processes or a combination of all. The most common raw materials utilized by metal fabrication companies include plate metal, formed or expanded metal, tube stock, welding wire or rod and casting. The industry players serve an array of markets, including construction, mining, aerospace and defense, automotive, agriculture, oil and gas, electronics/electrical components, industrial equipment and general consumer.
Trends Shaping the Future of the Metal Products - Procurement and Fabrication Industry
Geopolitical Issues Might Derail Recent Pickup in Manufacturing Activity: The Institute for Supply Management’s manufacturing index returned to expansion territory with a reading of 52.6% in January 2026 after 10 months of contraction. The index stayed in expansion in March 2026 at 52.7%, slightly above February’s 52.4%. However, the New Orders Index slowed to 53.5% from 55.8% in February, pointing to a less consistent demand trajectory. Industry sentiment has also weakened, with more negative commentary driven by concerns around tariffs and ongoing tensions in the Middle East.
High Costs & Tariff Concerns Ail the Industry: The industry has been experiencing significant inflation levels, including higher prices for labor, freight and fuel. The companies are witnessing labor shortages for some positions and incurring steep labor costs to meet demand. The industry players are focusing on pricing actions, cost-cutting measures, efforts to improve productivity and efficiency, and the diversification of the supplier bases to mitigate some headwinds. Also, the imposition of tariffs is anticipated to lead to higher costs for the industry.
Automation & End-Market Growth to Act as Catalysts: The industry’s customer-focused approach to provide cost-effective technical solutions, automation to increase efficiency and lower labor costs, and the development of innovative products will drive growth in the days ahead. Improvements in end-use sectors, such as manufacturing, aerospace and automotive, are anticipated to benefit the metal fabrication market over the next few years. Developing countries hold promise due to rapid industrialization. This, in turn, is likely to create demand.
Zacks Industry Rank Indicates Dim Prospects
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates tepid prospects in the near term. The Zacks Metal Products - Procurement and Fabrication industry, a nine-stock group within the broader Industrial Products sector, currently carries a Zacks Industry Rank #236, which places it in the bottom 3% of the 244 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.
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 the valuation picture.
Industry Vs. Broader Market
The Zacks Metal Products - Procurement and Fabrication industry has outperformed its sector and Zacks S&P 500 composite over the past year.
Over this period, the industry has grown 66.5% compared with the sector’s increase of 43.3% and the Zacks S&P 500 composite’s rise of 36.2%.
One-Year Price Performance
Industry's Current Valuation
Based on the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing the Metal Products - Procurement and Fabrication companies, the industry is currently trading at 6.83 compared with the S&P 500’s 11.14 and the Industrial Products sector’s forward 12-month EV/EBITDA of 20.16. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) F12M Ratio
Enterprise Value/EBITDA (EV/EBITDA) F12M Ratio
Over the last five years, the industry traded as high as 13.99 and as low as 5.08, with the median at 10.30.
2 Metal Products - Procurement and Fabrication Stocks to Keep Tabs on
ESAB: The company is well-positioned for long-term organic growth by strengthening its product portfolio and expanding its customer base. It has been actively building scale through acquisitions. The company recently inked a deal to acquire Eddyfi Technologies, a global leader in advanced inspection and monitoring technologies, for $1.45 billion. Eddyfi is expected to generate approximately $270 million of revenues and $80 million of adjusted EBITDA in 2026, or $100 million with expected annualized run-rate synergies. The deal, expected to close by mid-2026, will position the company as a comprehensive provider of end-to-end solutions across fabrication, inspection and monitoring. This acquisition significantly expands ESAB’s total addressable market by approximately $5 billion and supports its transition toward a faster-growing, higher-margin and less cyclical portfolio. It also deepens exposure to attractive, high-growth sectors such as aerospace and defense, nuclear, energy, and civil infrastructure. In 2025, ESAB acquired Bavaria Schweisstechnik, DeltaP s.r.l., Aktiv Technologies Private Limited, and EWM GmbH, which collectively contributed approximately $79 million to annual net sales. These followed earlier acquisitions, including SUMIG, ESAB Bangladesh Private Limited and Sager S.A., reinforcing its global footprint. Looking ahead, investments in AI and infrastructure are expected to further support margin expansion, particularly through improved operational efficiencies and productivity enhancements. ESAB shares moved up 8.4% in the last three months.
The Zacks Consensus Estimate for North Bethesda, MD-based ESAB’s current-year earnings indicates year-over-year growth of 10.6%. The estimate has moved up 0.2% over the past 60 days. The company has a trailing four-quarter earnings surprise of 3.03%. ESAB currently has a long-term estimated earnings growth of 9.24%. It currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: ESAB
Century Aluminum: The company is poised to benefit from strong global aluminum demand, supported by improving industrial activity and steady consumption across key end markets. In 2025, Century Aluminum produced approximately 638,000 tons of primary aluminum, with operations at facilities including Grundartangi in Iceland, Sebree in Kentucky and Mt. Holly in South Carolina. The company is in the process of restoring curtailed capacity at its Mt. Holly smelter, targeting a return to full production by mid-2026. An extended power agreement with Santee Cooper, finalized in October 2025, secures the electricity supply through 2031 and supports this ramp-up. In January 2026, the company inked a joint development deal with Emirates Global Aluminium to build a new aluminum smelter in Oklahoma. This is expected to produce 750,000 tons of aluminum annually, increasing domestic production in the United States. At the same time, the company is focused on cost control and cash preservation, aiming to improve near-term financial performance despite a challenging market backdrop.
The Zacks Consensus Estimate for Chicago, IL-based CENX’s current-year earnings has remained unchanged at $6.72 per share over the past 60 days. The estimate suggests solid year-over-year growth from 42 cents in 2025. CENX currently carries a Zacks Rank of 3.
Price and Consensus: CENX
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ESAB Corporation (ESAB): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).