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Kennametal Inc

Kennametal Inc

KMT
$29.44USD↑+1.06%+0.31 today

MARKET CAP

2.2B

P/E (TTM)

16.5x

FWD P/E

—

DAY RANGE

$29 – $30

52W RANGE

$20
$44

AI Summary

Stalk
StalkMedium

KMT’s extreme oversold status qualifies it for mean-reversion eligibility, forcing a medium-term bullish bias despite the persistent downtrend. Price remains rejected at the declining 9 EMA and 20 EMA and is extended below these EMAs; execution should be deferred until price shows clear acceptance above the EMAs or stabilizes at the ~$29.44 support zone.

  • ↑Q4 revenue $736.6M (+42.7% YOY) and annual sales $2.36B (+20% YOY)
  • ↑Q4 adjusted EPS $2.96 (+242% YOY) beat consensus by 28%
  • ↓Free cash flow negative $79M in Q4 due to higher tungsten inventory
Full analysis →

The case for & against

Bull & Bear analysis

Bullish

Kennametal Inc. (NYSE: KMT) is a leading player in the advanced materials and manufacturing sector, specializing in metal cutting and infrastructure solutions. The company is strategically focused on high-growth end markets, including aerospace, defense, energy, and transportation. With expertise in material science and engineering, Kennametal aims to enhance its product offerings and expand market share through innovative solutions. The current landscape emphasizes the company's commitment to operational efficiency, driven by strong market demand in core sectors.

Bull says

  • ↑Q4 revenue $736.6M (+42.7% YOY) and annual sales $2.36B (+20% YOY)
  • ↑Q4 adjusted EPS $2.96 (+242% YOY) beat consensus by 28%
  • ↑FY27 sales guidance $3.33–$3.45B; expects high double-digit growth in aerospace/defense
  • ↑Adjusted EBITDA margin at 46.8%, reflecting strong cost management and pricing
  • ↑Returned $71M to shareholders ($61M dividends, $10M buybacks)
  • ↑High earnings yield and 1.29x book-to-price ratio suggest potential undervaluation

Bear says

  • ↓Free cash flow negative $79M in Q4 due to higher tungsten inventory
  • ↓Rising tungsten prices squeeze margins and elevate working capital needs
  • ↓Growth and profitability factors are weak, reflecting potential demand challenges
  • ↓High short interest and low hedge fund ownership indicate institutional skepticism
  • ↓Transportation end market remains soft; aerospace reliance exposes geopolitics risk
  • ↓Analyst revisions low, signaling lowered expectations and potential downward sentiment

Investment themes with KMT

High Dividend Yield↓ -0.51%

Companies paying above-average dividends

AVGO · JPM · XOM

Earnings Call · Q3 2024 · Mgmt. Guidance

Updated 05-08-2025neutral

Transcript signals

Bull points

  • Free operating cash flow year to date was $84 million up from $60 million in the prior year. The increase of free operating cash flow was driven primarily by working capital changes including improved inventory levels, partially offset by higher capital expenditures and lower net income.
  • we continue the share repurchase program this quarter with $15 million of shares bought back bringing the total amount repurchased to $178 million. Our share repurchase program reflects the confidence we have in our ability to execute our strategy for long-term value creation despite quarterly macroeconomic headwinds.
  • I'm exceptionally proud of the work our teams have done to make Kennametal stronger over the last seven years.

Bear points

  • sales decreased 4% year-over-year with organic decline of 2%, unfavorable business days of 1% and unfavorable currency exchange of 1%.
  • adjusted EBITDA declined 150 basis points primarily due to lower sales and production volumes, higher wages and general inflation, unfavorable foreign exchange and the continued effect of unfavorable timing of pricing compared to raw material costs in the Infrastructure segment.
  • Metal Cutting’s adjusted operating margins decreased 230 basis points year-over-year driven by lower sales and production volumes, higher wages and general inflation and a property sale gain in the prior year.
Read full transcript analysis ›