3 Industrials Stocks Facing Headwinds

Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 9.4% over the past six months. This performance was worse than the S&P 500’s 2.4% fall.

Investors should tread carefully as timing cyclical companies is a challenging task, and any misstep can have you catching a falling knife. Taking that into account, here are three industrials stocks we’re swiping left on.

Trinity (TRN)

Market Cap: $2.09 billion

Operating under the trade name TrinityRail, Trinity (NYSE:TRN) is a provider of railcar products and services in North America.

Why Are We Wary of TRN?

1. Annual sales declines of 1.1% for the past five years show its products and services struggled to connect with the market during this cycle
2. Negative free cash flow raises questions about the return timeline for its investments
3. 8× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Trinity is trading at $25.64 per share, or 3.9x forward EV-to-EBITDA. To fully understand why you should be careful with TRN, check out our full research report (it’s free).

Vontier (VNT)

Market Cap: $5.30 billion

A spin-off of a spin-off, Vontier (NYSE:VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.

Why Should You Dump VNT?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Free cash flow margin shrank by 14.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Waning returns on capital imply its previous profit engines are losing steam

Vontier’s stock price of $35.81 implies a valuation ratio of 11.3x forward P/E. Read our free research report to see why you should think twice about including VNT in your portfolio.

John Bean (JBTM)

Market Cap: $6.26 billion

Tracing back to its invention of the mechanical milk bottle filler in 1884, John Bean (NYSE:JBT) designs, manufactures, and sells equipment used for food processing and aviation.

Why Should You Sell JBTM?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Free cash flow margin dropped by 6.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $120.50 per share, John Bean trades at 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than JBTM.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.