Whether you see them or not, industrials businesses play a crucial part in our daily activities. Their momentum is also rising as lower interest rates have incentivized higher capital spending. As a result, the industry has posted a 23.5% gain over the past six months, beating the S&P 500 by 16 percentage points.

Nevertheless, investors must be mindful as the cycle can unexpectedly turn. When this inevitably happens, only the elite companies will survive and ultimately thrive. Keeping that in mind, here are three industrials stocks that may face trouble.

Lincoln Electric (LECO)

Market Cap: $15.85 billion

Headquartered in Ohio, Lincoln Electric (NASDAQ: LECO) manufactures and sells welding equipment for various industries.

Why Do We Think Twice About LECO?

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. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.4% annually
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Lincoln Electric is trading at $288.57 per share, or 26.7x forward P/E. Dive into our free research report to see why there are better opportunities than LECO.

Gibraltar (ROCK)

Market Cap: $1.57 billion

Gibraltar (NASDAQ: ROCK) makes renewable energy, agriculture technology and infrastructure products. Its mission statement is to make everyday living more sustainable.

Why Do We Steer Clear of ROCK?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.4% annually over the last two years
2. Sales are projected to be flat over the next 12 months and imply weak demand
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 3.1% annually

At $53.13 per share, Gibraltar trades at 12.9x forward P/E. If you’re considering ROCK for your portfolio, see our FREE research report to learn more.

Snap-on (SNA)

Market Cap: $19.93 billion

Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.

Why Are We Cautious About SNA?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Flat earnings per share over the last two years lagged its peers
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Snap-on’s stock price of $383.76 implies a valuation ratio of 19.3x forward P/E. Read our free research report to see why you should think twice about including SNA in your portfolio.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.