Three Opportunities in Metal Fabrication: Market Recovery Attracts Investors

The metal fabrication sector is experiencing a notable turnaround after extended weakness. Recent manufacturing expansion signals strengthening demand across diverse end markets, creating a compelling case for investors to reassess metal fabrication companies. Strategic pricing adjustments combined with disciplined cost management are helping producers maintain margins despite tariff pressures and elevated input costs. Three standout companies—TriMas Corp. (TRS), GrafTech International (EAF), and NN Inc. (NNBR)—are particularly well-positioned to capitalize on this recovery through their focus on operational excellence and market share expansion.

Why Metal Fabrication Companies Are Gaining Momentum

The metal fabrication industry has historically served as a leading indicator of broader economic health. Recent data confirms this sector is pivoting toward expansion territory. The Institute for Supply Management’s manufacturing index climbed to 52.6% in early 2026, marking its return to growth after twelve consecutive months of contraction. More importantly, the New Orders Index surged to 57.1%—the first expansion since mid-2025—while Production activity hit its strongest level since February 2022 at 55.9%.

What stands out: metal fabrication producers were among the select few industries posting gains across all three metrics simultaneously, underscoring genuine underlying strength rather than temporary blips.

Demand is broad-based, touching everything from aerospace and automotive to construction, mining, and industrial equipment manufacturing. This diversification across end markets reduces risk and supports sustainable growth.

Navigating Tariffs and Cost Pressures: A Turning Point

Metal fabrication companies have grappled with a toxic mix of pressures: labor scarcity pushing wages higher, elevated freight and fuel costs, and now tariff uncertainty. Rather than absorbing these headwinds, forward-thinking manufacturers are taking control through strategic action.

Companies are implementing three-pronged strategies:

• Pricing Power: Selective price increases are offsetting input cost inflation while preserving customer relationships through value-added service bundles
• Supply Chain Diversification: Producers are deliberately shifting sourcing to bypass tariff-exposed geographies, with some geographic mixes now heavily weighted toward domestic sourcing
• Operational Efficiency: Labor optimization, process automation, and waste reduction initiatives are compressing cost structures even as absolute labor costs rise

This combination transforms what could have been a margin squeeze into an opportunity for disciplined operators to strengthen competitive positioning.

Three Metal Fabrication Stocks With Upside Potential

TriMas Corporation: Focused Bet on Packaging Strength

TriMas has undergone significant portfolio reshuffling to zero in on higher-return segments. The packaging division continues delivering robust performance, riding strong demand tailwinds in beauty and personal care applications. Management’s emphasis on product innovation and sustainable packaging solutions is resonating with customers, driving organic expansion.

Recent capacity investments are expected to unlock additional volume, while internal cost discipline is visibly driving margin expansion. The company’s strategy to divest non-core aerospace operations signals a sharpened strategic focus. Management’s track record of bolt-on acquisitions—both within metal fabrication and adjacent categories—provides multiple avenues for portfolio expansion without requiring massive capital deployment.

The Zacks consensus view has become increasingly constructive, with 2026 earnings estimates rising 1.6% over the past two months. Projected earnings growth of 20.2% year-over-year reflects confidence in both market recovery and internal execution. TriMas carries a Zacks Rank of 2 (Buy).

GrafTech International: Volume Growth Meets Cost Control

GrafTech’s most recent quarterly results demonstrate the power of disciplined execution against recovery tailwinds. Sales volumes expanded 9% compared to the prior year, with particularly impressive 53% growth in U.S. markets. This geographic pivot—deliberately shifting the sales mix toward North America—is working exactly as intended.

Management has guided for 8-10% volume growth across full-year 2025, reflecting confidence in market share capture initiatives. Perhaps most impressive: GrafTech achieved a 10% reduction in cash cost per metric ton despite varying demand levels, showcasing operational flexibility and cost discipline.

The global steel industry landscape remains attractive. U.S. steel output is anticipated to expand, while European trade policy adjustments support regional recovery. By leveraging its vertically integrated production platform and continuing geographic optimization, GrafTech appears well-equipped to extract outsized returns from this multi-year cycle.

Current consensus estimates project a loss of $4.20 per share for 2026—but this represents meaningful improvement from the 2025 projected loss of $5.29. The trajectory matters more than absolute levels; earnings surprise history (0.68% average) suggests modest execution beats are achievable. EAF carries a Zacks Rank of 2.

NN Inc.: Transformation Paying Dividends

NN Inc.'s multi-year transformation narrative has shifted from promise to execution. The company now operates a substantially higher-margin product portfolio while deliberately exiting lower-return business segments. Rationalization efforts have successfully pruned unprofitable operations, while disciplined cash management has improved financial flexibility.

The sales pipeline offers a compelling forward indicator: NN now maintains its largest dedicated sales team and a pipeline exceeding 800 active opportunities representing over $800 million in potential annual revenue. This scale provides meaningful runway for organic growth independent of overall market dynamics.

Management’s M&A strategy is equally instructive. Successful 2025 acquisitions are being followed by continued evaluation of both transformational deals (to substantially accelerate scale) and smaller tuck-in acquisitions (targeting cost synergies and capability expansion).

Zacks consensus 2026 earnings estimates have jumped 16.7% over the past 60 days, reflecting positive sentiment around both market recovery and internal initiatives. NN’s trailing four-quarter earnings surprise history (97.9% average) demonstrates a pattern of operational outperformance. The company carries a projected long-term earnings growth rate of 45% and holds a Zacks Rank of 2.

Valuation and Industry Standing

The metal fabrication sector currently trades at a meaningful valuation discount to broader industrials. On a trailing 12-month EV/EBITDA basis, the industry trades at 10.79X compared to 19.78X for the broader Industrial Products sector and 19.05X for the S&P 500 composite. This valuation gap creates asymmetric risk-reward, particularly given stronger growth prospects.

Industry positioning is equally strong. The Zacks Metal Products - Procurement and Fabrication sector carries an Industry Rank of #55, placing it in the top 23% of ranked industries. Historical analysis confirms that top-50%-ranked industries outperform bottom-50% peers by 2:1 margins or greater.

Over the past year, the metal fabrication sector has appreciated 50% against sector gains of 15.5% and S&P 500 advances of 17.3%—evidence that the recovery narrative has legs and selective outperformance may continue.

The Bottom Line

Metal fabrication companies have moved from defensive postures to genuinely attractive investment opportunities. Combining industry-wide recovery momentum, elevated pricing power, improving operational metrics, and compelling valuations creates a favorable backdrop for investors seeking exposure to industrial production and infrastructure buildout themes. The three companies highlighted above each offer distinct pathways to participation in this cycle.