Dj Regal Rexnord Price Target Raised To $175.00/Share From $170.00 By Keybanc

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the engineered components and systems industry, including ESCO and its peers.

Engineered components and systems companies possess technical know-how in sometimes narrow areas such as metal forming or intelligent robotics. Lately, automation and connected equipment collecting analyzable data have been trending, creating new demand. On the other hand, like the broader industrials sector, engineered components and systems companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 13 engineered components and systems stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was 0.5% below.

In light of this news, share prices of the companies have held steady as they are up 2.6% on average since the latest earnings results.

ESCO

A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO is a provider of engineered components for the aerospace, defense, and utility sectors.

ESCO reported revenues of $352.7 million, up 18.1% year on year. This print exceeded analysts’ expectations by 15.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ revenue estimates and full-year EPS guidance exceeding analysts’ expectations.

Bryan Sayler, Chief Executive Officer and President, commented, “We finished the year strong with another great quarter highlighted by 29 percent sales growth, 100 basis points of Adjusted EBIT margin improvement, and a 30 percent increase in Adjusted EPS from Continuing Operations.

ESCO scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 4.2% since reporting and currently trades at $219.

Read why we think that ESCO is one of the best engineered components and systems stocks, our full report is free.

Best Q3: Timken

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken is a provider of industrial parts used across various sectors.

Timken reported revenues of $1.16 billion, up 2.7% year on year, outperforming analysts’ expectations by 3.6%. The business had an exceptional quarter with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.

The market seems happy with the results as the stock is up 17.4% since reporting. It currently trades at $90.65.

Weakest Q3: Park-Ohio

Based in Cleveland, Park-Ohio provides supply chain management services, capital equipment, and manufactured components.

Park-Ohio reported revenues of $398.6 million, down 4.5% year on year, falling short of analysts’ expectations by 4.5%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.

Interestingly, the stock is up 6.5% since the results and currently trades at $22.45.

Read our full analysis of Park-Ohio’s results here.

Regal Rexnord

Headquartered in Milwaukee, Regal Rexnord provides power transmission and industrial automation products.

Regal Rexnord reported revenues of $1.50 billion, up 1.3% year on year. This print met analysts’ expectations. Aside from that, it was a slower quarter as it produced full-year EPS guidance missing analysts’ expectations and a miss of analysts’ adjusted operating income estimates.

The stock is up 1.1% since reporting and currently trades at $152.25.

Read our full, actionable report on Regal Rexnord here, it’s free.

RBC Bearings

With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.

RBC Bearings reported revenues of $455.3 million, up 14.4% year on year. This number topped analysts’ expectations by 1.1%. Taking a step back, it was a satisfactory quarter as it also logged an impressive beat of analysts’ Aerospace and Defense revenue estimates but a miss of analysts’ Diversified Industrials revenue estimates.

The stock is up 21.8% since reporting and currently trades at $495.21.

Read our full, actionable report on RBC Bearings here, it’s free.

What Happened?

A number of stocks jumped in the afternoon session after markets rotated out of tech names to position themselves for a massive injection of government spending. 

The sector was ignited by President Trump's call for a $1.5 trillion defense budget for 2027, a significant increase that sent defense contractors surging. Northrop Grumman jumped over 10% and Lockheed Martin gained nearly 8%, acting as the primary engine for the sector's outperformance.Beyond the immediate defense rally, the industrial sector benefited from a broader stabilization in energy costs, with crude prices rebounding. This combination of policy-driven demand and stabilizing input costs made heavy industry an attractive destination.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Engineered Components and Systems company Graham Corporation jumped 4%. Is now the time to buy Graham Corporation? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company Hyster-Yale Materials Handling jumped 4.9%. Is now the time to buy Hyster-Yale Materials Handling? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company Hillman jumped 4.9%. Is now the time to buy Hillman? Access our full analysis report here, it’s free.
• Engineered Components and Systems company Regal Rexnord jumped 3.5%. Is now the time to buy Regal Rexnord? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company ESAB jumped 4.3%. Is now the time to buy ESAB? Access our full analysis report here, it’s free.

Zooming In On Hyster-Yale Materials Handling (HY)

Hyster-Yale Materials Handling’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 10 days ago when the stock dropped 3.1% on the news that major indices pulled back from record highs reached the previous week. The S&P 500 and Nasdaq were under pressure as the dominant artificial intelligence trade cooled off. Notable names like Nvidia were down as traders locked in profits following a banner year where the Nasdaq surged over 20%. With the S&P 500 recently hitting intraday highs near 6,945, this dip reflected a shift in internal momentum rather than a response to major economic news.

Hyster-Yale Materials Handling is up 8.5% since the beginning of the year, but at $32.64 per share, it is still trading 40.4% below its 52-week high of $54.76 from January 2025. Investors who bought $1,000 worth of Hyster-Yale Materials Handling’s shares 5 years ago would now be looking at an investment worth $494.70.