12 Industrial Stocks Wall Street Says Are Too Cheap to Ignore
Undervalued Giants Positioned for Big Gains in 2025
Industrial stocks are the backbone of any growing economy — covering everything from heavy machinery to aerospace ✈️ to digital business services . And with government spending on infrastructure rising globally, this sector is heating up fast.
So far in 2025, the Morningstar US Industrials Index is up 17.62%, slightly outperforming the broader US market at 17.27%. But the real story lies in the undervalued gems analysts believe are still trading below their true worth.
Morningstar has identified 12 industrial stocks that are deeply undervalued and backed by strong competitive advantages (economic moats). These companies also have solid fundamentals and reasonable risk ratings.
Here’s the detailed breakdown ⬇️⬇️⬇️
1. CNH Industrial (CNH)
Most undervalued pick — trading 48% below its fair value!
• A global giant in agricultural machinery and the world’s 2nd-largest manufacturer.
• Strength lies in iconic brands, global distribution, and loyal customer base.
• Currently refocused on its agriculture business after restructuring and spinning off Iveco.
• Big growth potential from precision agriculture — digital technologies for smarter farming.
Analysts say rising adoption of digital farming will benefit all major players, including CNH.
2. Global Payments (GPN)
Deeply undervalued — 41% below fair value
• A leader in payment processing and small–medium merchant software.
• Market fears disruption, but analysts believe its competitive position remains strong .
• Recently announced a massive deal to acquire Worldpay, expanding processing volume from $1T to $4T.
• High risk, high reward ⚖️ — but long-term moat could strengthen significantly.
️ 3. Terex (TEX)
40% undervalued
• Makes aerial work platforms, quarry equipment, and recycling machinery.
• Strong brands + engineered products = top positions in most categories.
• Streamlined its business after exiting weak-performing units.
• Now more focused, profitable, and cash-strong.
• Merger with REV Group may enhance stability and reduce cyclicality ✨.
4. Masco (MAS)
27% undervalued and boasts a wide economic moat
• Maker of home improvement products like plumbing systems and decorative architectural items.
• Repositioned its business since 2014 by selling weak units and focusing on high-profit segments.
• 88% of revenue now tied to repair and remodeling, a resilient long-term market ✨.
• Expected to benefit from aging housing stock and rising demand for smart, energy-efficient homes.
5. Oshkosh (OSK)
23% undervalued
• Produces access equipment, municipal vehicles, and military trucks.
• Market-leading brands + strong engineering foundation .
• Benefiting from global trends in infrastructure spending and modernization.
• Recent acquisition of AeroTech strengthens foothold in aviation support.
️ 6. BAE Systems (BAESY)
22% undervalued + wide moat
• Europe’s largest defense contractor and a key partner to the US military.
• Global tension and rising defense budgets = strong growth prospects .
• Expected surge in sales of Eurofighter jets, munitions, and combat vehicles.
• Huge upside from nuclear submarine program involving Australia, UK, and US (AUKUS).
7. PACCAR (PCAR)
22% undervalued
• Premium manufacturer of heavy-duty trucks (Kenworth, Peterbilt, DAF).
• Exceptional management, strong balance sheet, and 86 years of profitability .
• Moving aggressively into autonomous and alternative powertrains.
• Expanding in-house engine production → long-term gains in parts and service revenue.
8. Equifax (EFX)
21% undervalued + wide moat
• One of the Big Three credit bureaus in the US.
• Benefits from high switching costs and scalable data infrastructure.
• Strong growth in income verification services for mortgages, auto loans, and employment.
• Has recovered reputation after 2017 data breach and invested heavily in cybersecurity.
9. Copart (CPRT)
21% undervalued + wide moat
• World leader in online salvage car auctions.
• Handles 3.5 million annual transactions across multiple continents .
• Dominates thanks to massive land capacity, superior service, and insurer partnerships.
• Gains market share after every major natural disaster due to reliable processing.
✈️ 10. Boeing (BA)
21% undervalued + wide moat
• Global aerospace giant with commercial planes, defense systems, and services.
• Recovering from 737 MAX crisis and pandemic disruptions.
• Strong long-term demand coming from emerging markets and China .
• 787 Dreamliner expected to rebound to full production after addressing quality issues.
11. RELX (RELX)
20% undervalued + wide moat
• Provides high-value analytics and decision tools used by businesses worldwide.
• Subscription-based revenue, highly recurring .
• Growing digital portfolio and expanding into new geographies.
• Extremely stable business with consistent margins and low uncertainty.
⚙️ 12. IDEX (IEX)
20% undervalued + wide moat
• Makes specialized pumps, valves, and fluidic systems.
• Dominant positions in niche, mission-critical applications — from DNA sequencing to water pumps.
• High customer switching costs = pricing power .
• Expected to grow faster than the industrial sector long-term due to consistent innovation.
What These Stocks Have in Common
Morningstar selected them based on:
✨ Being undervalued relative to fair value
✨ Having strong competitive advantages (moats)
✨ Reasonable uncertainty ratings
✨ Exposure to long-term growth trends like:
• Infrastructure spending
• Digitalization
• Precision agriculture
• Smart homes
• Defense modernization
• Automation
Undervalued Giants Positioned for Big Gains in 2025
Industrial stocks are the backbone of any growing economy — covering everything from heavy machinery to aerospace ✈️ to digital business services . And with government spending on infrastructure rising globally, this sector is heating up fast.
So far in 2025, the Morningstar US Industrials Index is up 17.62%, slightly outperforming the broader US market at 17.27%. But the real story lies in the undervalued gems analysts believe are still trading below their true worth.
Morningstar has identified 12 industrial stocks that are deeply undervalued and backed by strong competitive advantages (economic moats). These companies also have solid fundamentals and reasonable risk ratings.
Here’s the detailed breakdown ⬇️⬇️⬇️
1. CNH Industrial (CNH)
Most undervalued pick — trading 48% below its fair value!
• A global giant in agricultural machinery and the world’s 2nd-largest manufacturer.
• Strength lies in iconic brands, global distribution, and loyal customer base.
• Currently refocused on its agriculture business after restructuring and spinning off Iveco.
• Big growth potential from precision agriculture — digital technologies for smarter farming.
Analysts say rising adoption of digital farming will benefit all major players, including CNH.
2. Global Payments (GPN)
Deeply undervalued — 41% below fair value
• A leader in payment processing and small–medium merchant software.
• Market fears disruption, but analysts believe its competitive position remains strong .
• Recently announced a massive deal to acquire Worldpay, expanding processing volume from $1T to $4T.
• High risk, high reward ⚖️ — but long-term moat could strengthen significantly.
️ 3. Terex (TEX)
40% undervalued
• Makes aerial work platforms, quarry equipment, and recycling machinery.
• Strong brands + engineered products = top positions in most categories.
• Streamlined its business after exiting weak-performing units.
• Now more focused, profitable, and cash-strong.
• Merger with REV Group may enhance stability and reduce cyclicality ✨.
4. Masco (MAS)
27% undervalued and boasts a wide economic moat
• Maker of home improvement products like plumbing systems and decorative architectural items.
• Repositioned its business since 2014 by selling weak units and focusing on high-profit segments.
• 88% of revenue now tied to repair and remodeling, a resilient long-term market ✨.
• Expected to benefit from aging housing stock and rising demand for smart, energy-efficient homes.
5. Oshkosh (OSK)
23% undervalued
• Produces access equipment, municipal vehicles, and military trucks.
• Market-leading brands + strong engineering foundation .
• Benefiting from global trends in infrastructure spending and modernization.
• Recent acquisition of AeroTech strengthens foothold in aviation support.
️ 6. BAE Systems (BAESY)
22% undervalued + wide moat
• Europe’s largest defense contractor and a key partner to the US military.
• Global tension and rising defense budgets = strong growth prospects .
• Expected surge in sales of Eurofighter jets, munitions, and combat vehicles.
• Huge upside from nuclear submarine program involving Australia, UK, and US (AUKUS).
7. PACCAR (PCAR)
22% undervalued
• Premium manufacturer of heavy-duty trucks (Kenworth, Peterbilt, DAF).
• Exceptional management, strong balance sheet, and 86 years of profitability .
• Moving aggressively into autonomous and alternative powertrains.
• Expanding in-house engine production → long-term gains in parts and service revenue.
8. Equifax (EFX)
21% undervalued + wide moat
• One of the Big Three credit bureaus in the US.
• Benefits from high switching costs and scalable data infrastructure.
• Strong growth in income verification services for mortgages, auto loans, and employment.
• Has recovered reputation after 2017 data breach and invested heavily in cybersecurity.
9. Copart (CPRT)
21% undervalued + wide moat
• World leader in online salvage car auctions.
• Handles 3.5 million annual transactions across multiple continents .
• Dominates thanks to massive land capacity, superior service, and insurer partnerships.
• Gains market share after every major natural disaster due to reliable processing.
✈️ 10. Boeing (BA)
21% undervalued + wide moat
• Global aerospace giant with commercial planes, defense systems, and services.
• Recovering from 737 MAX crisis and pandemic disruptions.
• Strong long-term demand coming from emerging markets and China .
• 787 Dreamliner expected to rebound to full production after addressing quality issues.
11. RELX (RELX)
20% undervalued + wide moat
• Provides high-value analytics and decision tools used by businesses worldwide.
• Subscription-based revenue, highly recurring .
• Growing digital portfolio and expanding into new geographies.
• Extremely stable business with consistent margins and low uncertainty.
⚙️ 12. IDEX (IEX)
20% undervalued + wide moat
• Makes specialized pumps, valves, and fluidic systems.
• Dominant positions in niche, mission-critical applications — from DNA sequencing to water pumps.
• High customer switching costs = pricing power .
• Expected to grow faster than the industrial sector long-term due to consistent innovation.
What These Stocks Have in Common
Morningstar selected them based on:
✨ Being undervalued relative to fair value
✨ Having strong competitive advantages (moats)
✨ Reasonable uncertainty ratings
✨ Exposure to long-term growth trends like:
• Infrastructure spending
• Digitalization
• Precision agriculture
• Smart homes
• Defense modernization
• Automation