Industrial’s Biggest Underdog: Why Oshkosh Corporation Is One Of The Most Underrated Stocks On The Market
- Prineh Lochawala
- May 24
- 7 min read
The industrial sector, which mainly deals with aerospace technology, defense mechanisms, engineering, and other modes of transportation, will experience massive growth by the end of 2026. According to a 2025 article published by MorningStar, stocks within the industrial sector have grown by 16% in 2026, and they are expected to continue due to growing power plants and widespread usage of AI in the industry. Many companies have remained entirely dominant within this industry, including Caterpillar and Boeing, but one underdog will prove to be a tour de force: Oshkosh Corporation. Oshkosh Corporation (NYSE: OSK) is known as a “do-it-all”. Founded in 1917 in Oshkosh, WI, the industrial company employs over 18,000 people across 150 countries worldwide. They own over 12 subsidiaries, with brands like Oshkosh Aerotech, Oshkosh Defense LLC, Pierce Manufacturing, and JLG Industries. Oshkosh manufactures defense mechanisms, airport equipment and on-land vehicles. With a heavy focus on autonomy, active safety, and intelligent products, they’ve managed to see great success as their stock price increased nearly 72% from last year. However, they have potential to obtain greater growth in 2026. Due to its large demand from the government, potential for margin expansion through its increased developments in autonomous and AI technologies, and growing demand in its “Vocational Segment”, Oshkosh Corporation has the potential for significant upside.
Defense vehicles, including the FMTV A2 LVAD’s, have been designed to increase mobility and provide attacks on land, which is operationally efficient for military soldiers. These defense vehicles have been in consistent demand by the U.S Government and the Department of Defense. In 2024, Oshkosh Corporation was awarded $1.54 billion for their FHTV V military vehicles and an additional $231.9 million order was issued for more modernized trucks, kits and kit installs. On April 16, 2026, another order of $42.3 Million was issued by the U.S for Oshkosh to provide the country with FHTV vehicles for the U.S Army. The surprising thing about this order is that it was the same day the U.S. released its ceasefire on the U.S, Israel, and Iran War, so the U.S greatly trusts in Oshkosh’s products for the future. Further adoption of Oshkosh’s products will come into fruition, as President Trump has recently announced a plan for his “Dream Military” campaign, proposing an increase in defense military spending budget to $1.5 trillion, a 66.5% growth from what it is currently. Also, with the contract the U.S government made with Oshkosh in 2024, more FHTV vehicles will continue to be provided for the nation until 2031. So, since the president is pushing to expand the military budget further and previous large contracts signifying huge government demand, Oshkosh Corporation will achieve great, consistent growth. The defense sector for Oshkosh Corporation has contributed over $2 billion (3.5% Y/Y growth). Due to increased confidence and purchases from the government, revenues are predicted to reach $10.8-11.8 billion (10-12% growth) and free cash flows around $650-680 million (14-20% growth) by the end of 2027. Other big-time defense vehicle companies including Raytheon, Lockheed Martin, General Dynamics, have failed to produce at the quantity the Department of Defense and the President requires from them, providing Oshkosh Corporation with a competitive advantage within their industry through their high-quality and efficiently produced products.
Oshkosh and one of its leading subsidiaries, JLG Industries, have been working together to develop their JLG Boom Lift with Robotic End Effector. This device can help weld planes, handle materials faster, and reduce risk of injuries by 40%. In CES 2026, a convention for some of the biggest innovations in industrial technology and robotics, Oshkosh showed off their Boom Lift to a huge panel of investors and industry leaders. Many huge players, like Hyundai, Doosan Robotics, and Hexagon AB, competed against Oshkosh within the robotics category. However, Oshkosh’s Boom Lift won the award for Best of Innovation in Robotics, and gained massive attention from people present at the panel. Even though Oshkosh is going up against some of the biggest companies to produce robotics, their JLG Boom Lift gains greater confidence from potential investors and proves to provide greater results compared to their competition. Mixed with robotic elements and AI, this product will help Oshkosh increase their productivity and other companies’ beyond their current high efficiency. In 2025, despite strong earnings, gross margins were at 17% and operating margins were at 9% due to high COGS. With similar goods such as the Boom Lift, Oshkosh can decrease the number of laborers working on production lines, which can decrease COGS by around 3% by the end of 2027. These investments within autonomous technologies allow for margin expansion, pushing gross margins to 18-20%. Operating expenses can decrease by 5% compared to the end of 2025, allowing operating margins to be between 9-11% and increasing operating income to over $1 billion. This will create a clear path towards stronger profitability and positive investor sentiment, as Oshkosh is looking forward to enhancing their usage of AI and robotic technology in production as the implementation of AI worldwide will continue to grow higher exponentially.
In 2025, Oshkosh Corporation’s “Vocational” segment grew by 28.5%, a much larger percentage than the other segments. The segment consists of a wide variety of products, such as airport equipment and fire trucks. Rapid urbanization and global infrastructure development cause a higher risk of fires, making fire trucks rapidly grow in demand. In 2025, the fire truck was worth more than $10 billion in North America. The fire truck market is set to grow at a CAGR of 2.7% and be worth over $9 billion by 2030. Oshkosh is a major player within this space and can potentially capture high profitability in the long term and grow by more than 40% in their stock, which investors are failing to see as they’ve noticed the 18% dip in the company’s stock in March. Within the “Vocational” Segment, Oshkosh’s fire trucks have also been put into place in airports. Many ARFF vehicles developed by Oshkosh are included in 100 countries and all 50 states within the U.S due to its rapid response timing to mitigate accidents at airports. One of Oshkosh’s ARFF vehicles, the Striker Volterra Airport Rescue and Firefighting Vehicle Fire trucks, also entered the CES 2026. Other companies including OYO, BoomSonic, and Clear went up against Oshkosh, and it won the 2026 CES Best Innovation in Travel and Tourism. The reason why they won this award is because these vehicles used a technology that Oshkosh developed called “ClearSky Intelligence”. This technology is a tracking system so that each ARFF vehicle can be tracked in real-time through a dashboard. Additionally, this technology can immediately diagnose problems of each vehicle and look at their meters in their fuel levels, maintenance, and water tank. These technologies can offer greater efficiency for airport crew and prevent accidents quickly. This achievement again proves how Oshkosh can produce goods with great quality and can deliver a great effect to service people within airports. Fire trucks are needed for societies and airports, so Oshkosh can steadily increase the price point of their fire trucks and still profit significantly, leaving their products with an inelastic demand. Demand for the vocational segment’s products will continue to grow, and Oshkosh can receive constant growth and perform much better than their production currently.
Of course, there are many risks when it comes to these issues. The high military budget that the Pentagon is proposing is seen as unrealistic and voted against by many Democrats. A 40% increase in spending isn’t seen as very favorable by the U.S and could increase its debt more than its current level at nearly $40 trillion. Also, a 10-day ceasefire announced by Trump has slowed down production for Oshkosh at the moment, so Oshkosh will likely see a stagnant growth or decline in their share price in the short-term. Despite these factors, Oshkosh will continue to gain support from the military as contracts are still being delivered and government agencies continue to have more confidence in the company.
Also, even though Oshkosh operates in many companies, further expansion in the Americas will cause market share to decrease in other countries. Currently, most of Oshkosh’s revenue comes from the Americas (86.2%). Yet, sales have decreased by 5% YTD in the U.S. Oshkosh is looking to expand more within the U.S and the Americas as a whole, but this could cause negative effects in other countries. In Europe, Africa, and the Middle East, their sales have increased by a surprising 33%, while their worldwide sales have decreased 10%. So, an insignificant presence in many regions worldwide mixed with Oshkosh looking to focus on expanding market presence in America could undermine the value and future earnings potential of the company.
Through heavy demand from the military, growing investments in autonomous and AI technologies, and consistent growth within their “Vocational” segment, Oshkosh Corporation has positioned themselves to be one of the most underrated stocks right now. With its current valuation, Oshkosh positions itself to have high-growing gains in the future.
References:
CES. “Oshkosh JLG Boom Lift with Robotic End Effector.” Ces.tech, CES, 2026, www.ces.tech/ces-innovation-awards/2026/oshkosh-jlg-boom-lift-with-robotic-end -effector/. Accessed 24 Apr. 2026.
FactSet Research Systems Inc. “FactSet | Integrated Financial Data and Software Solutions for Investment Professionals.” Factset.com, 2024, www.factset.com/.
Hansen, Sarah. “6 Stocks Driving the 2026 Stock Market Rotation.” Morningstar, Inc., 20 Feb. 2026, www.morningstar.com/stocks/6-stocks-driving-2026-stock-market-rotation.
Radloff, Abigail. “Oshkosh Defense Awarded $42.3 Million Order to Support U.S. Army Reserve Readiness | Oshkosh Defense.” Oshkosh Defense, Oshkosh Corporation, 16 Apr. 2026, oshkoshdefense.com/oshkosh-defense-awarded-42-3-million-army-reserve-readiness-contract/. Accessed 24 Apr. 2026.
Terlep, Sharon, and Marcus Weisgerber. “Exclusive | Pentagon Approaches Automakers, Manufacturers to Boost Weapons Production.” The Wall Street Journal, Dow Jones & Company, 15 Apr. 2026, www.wsj.com/politics/national-security/pentagon-approaches-automakers-manufacturers-to-boost-weapons-production-19538557. Accessed 24 Apr. 2026.
Wire, Business. “Stock Market Insights | Seeking Alpha.” Seeking Alpha, Business Wire, 26 Mar. 2026, seekingalpha.com/pr/20447022-oshkosh-defense-showcases-integrated-mobility-solutions-at-ausa-global-force-2026. Accessed 24 Apr. 2026.
