Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and the industry is currently lagging as its six-month return of 4.3% has trailed the S&P 500’s 7.1% gain.

Some companies can grow regardless of the economic backdrop, but the odds aren’t great for the ones we’re analyzing today. With that said, here are three industrials stocks best left ignored.

Textron (TXT)

Market Cap: $15.35 billion

Listed on the NYSE in 1947, Textron (NYSE: TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.

Why Are We Cautious About TXT?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Projected sales growth of 6.9% for the next 12 months suggests sluggish demand
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.2 percentage points

Textron’s stock price of $85.02 implies a valuation ratio of 13.5x forward P/E. Check out our free in-depth research report to learn more about why TXT doesn’t pass our bar.

Air Lease (AL)

Market Cap: $6.57 billion

Established by a founder of Century City in Los Angeles, Air Lease Corporation (NYSE: AL) provides aircraft leasing and financing solutions to airlines worldwide.

Why Should You Dump AL?

1. Muted 6.4% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
2. Free cash flow margin shrank by 50.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

At $58.75 per share, Air Lease trades at 3.3x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including AL in your portfolio.

Redwire (RDW)

Market Cap: $2.37 billion

Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.

Why Do We Think Twice About RDW?

1. Issuance of new shares over the last four years caused its earnings per share to fall by 38.9% annually while its revenue grew
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution

Redwire is trading at $16.87 per share, or 20.9x forward EV-to-EBITDA. To fully understand why you should be careful with RDW, check out our full research report (it’s free).

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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