What Happened?
A number of stocks fell in the afternoon session after an unexpectedly sharp rise in wholesale inflation fueled concerns about rising costs and their impact on corporate profits. The primary catalyst was the July 2025 Producer Price Index (PPI), a measure of inflation at the wholesale level, which jumped 0.9% against forecasts of a 0.2% rise. This represents the most significant monthly increase in over three years, pointing to mounting cost pressures for manufacturers, with tariffs cited as a key factor. This data complicates the Federal Reserve's upcoming interest rate decisions, as persistent inflation may prevent rate cuts, creating a headwind for cyclical sectors like Industrials.
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:
- Construction Machinery company Manitowoc (NYSE: MTW) fell 4.3%. Is now the time to buy Manitowoc? Access our full analysis report here, it’s free.
- Engineered Components and Systems company Regal Rexnord (NYSE: RRX) fell 4.2%. Is now the time to buy Regal Rexnord? Access our full analysis report here, it’s free.
- Energy Products and Services company FTAI Infrastructure (NASDAQ: FIP) fell 3.5%. Is now the time to buy FTAI Infrastructure? Access our full analysis report here, it’s free.
- Engineered Components and Systems company Timken (NYSE: TKR) fell 4.3%. Is now the time to buy Timken? Access our full analysis report here, it’s free.
- Home Construction Materials company American Woodmark (NASDAQ: AMWD) fell 3.9%. Is now the time to buy American Woodmark? Access our full analysis report here, it’s free.
Zooming In On Manitowoc (MTW)
Manitowoc’s shares are very volatile and have had 26 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 6 days ago when the stock dropped 16.9% on the news that its second-quarter 2025 earnings report, as investors looked past a significant profit beat to focus on a top-line miss and weakening underlying metrics. While the crane manufacturer's adjusted earnings per share of $2.80 crushed analyst expectations, its revenue told a different story. Net sales fell 4% year-over-year to $539.5 million, missing consensus estimates. Investor concerns were likely amplified by other signs of weakness, including a 12.8% year-over-year decline in the company's order backlog to $729.3 million. Furthermore, adjusted EBITDA missed estimates by over 30%, and free cash flow worsened significantly to a loss of $73.7 million. These results suggested that despite the strong bottom-line number, the company faces headwinds from slowing demand and operational challenges.
Manitowoc is up 5.5% since the beginning of the year, but at $9.39 per share, it is still trading 29.9% below its 52-week high of $13.39 from July 2025. Investors who bought $1,000 worth of Manitowoc’s shares 5 years ago would now be looking at an investment worth $885.85.
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