Carpenter Technology (CRS) AI Stock Analysis

• Market Cap: $7.65B
• Dividend Yield: 0.52%
• Average Volume (3M): 896.37K
• Price to Earnings (P/E): 28.9
• Beta (1Y): 1.34
• Revenue Growth: 5.65%
• EPS Growth: 84.17%
• Country: US
• Employees: 4,600
• Sector: Industrials
• Sector Strength: 64
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 5.30
• Shares Outstanding: 49,948,635
• 10 Day Avg. Volume: 773,290
• 30 Day Avg. Volume: 896,371
• PEG Ratio: 0.34
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.19
• Price to Cash Flow (P/CF): 33.80
• P/FCF Ratio: 33.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $248.60
• Price Target Upside: 64.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Carpenter Technology's stock is rated at 75.9, driven by strong financial performance and positive earnings outlook. The technical analysis indicates some short-term bearish trends, and the high P/E ratio suggests overvaluation. However, strategic corporate actions and increased shareholder returns enhance the stock's appeal.

Positive Factors

Financial Performance

CRS increased FY25 operating income guidance to a range of $500M-$520M, up from $460M-$500M.

Guidance

CRS raised FY25 guidance ahead of the Street, reflecting continued momentum in the current environment.

Market Position

The company's significant barriers to entry cement its role as an indispensable supplier in the specialty alloys market.

Negative Factors

Backlog Concerns

Despite the modest EPS beat, many investors viewed the Dec Q print as 'glass half empty' given backlog erosion, customer deferral requests, modest lead time contraction in engine alloy, and concern that CRS's pricing power may erode.

Supply Chain Disruptions

Boeing's strike duration is unknowable, which may elongate the supply chain inventory overhang.

Carpenter Technology Business Overview & Revenue Model

Company Description

Carpenter Technology Corporation engages in the manufacture, fabrication, and distribution of specialty metals in the United States, Europe, the Asia Pacific, Mexico, Canada, and internationally. It operates in two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels, as well as additives, and metal powders and parts. It serves aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company was founded in 1889 and is headquartered in Philadelphia, Pennsylvania.

How the Company Makes Money

Carpenter Technology makes money primarily through the manufacturing and sale of premium specialty alloys and stainless steels. The company generates revenue by supplying materials that are critical for high-performance applications in industries such as aerospace, defense, medical, energy, and transportation. Key revenue streams include the sale of engineered products that meet specific customer requirements, often involving high-precision and high-strength specifications. Carpenter Technology also engages in strategic partnerships and collaborations that enhance its product offerings and expand its market reach. Additionally, the company invests in research and development to innovate and improve its product lines, which helps maintain its competitive edge and attract new business opportunities.

Carpenter Technology Financial Statement Overview

Summary

Carpenter Technology is exhibiting a robust financial performance, characterized by strong revenue and profit growth, healthy margins, and improved cash flow generation. The company's financial stability is supported by a solid balance sheet with manageable leverage.

Income Statement

Carpenter Technology has shown strong revenue growth with a significant increase from $1.83 billion in 2022 to $2.87 billion in the TTM (Trailing-Twelve-Months). The company improved its Gross Profit Margin to 24.3% and its Net Profit Margin to 9.34%, showcasing enhanced operational efficiency and profitability. The EBIT and EBITDA margins of 15.83% and 18.35% respectively indicate robust core earnings, reflecting a positive trajectory in financial performance.

Balance Sheet

The balance sheet reflects a solid equity base with Stockholders' Equity making up 51.61% of Total Assets, indicating a healthy Equity Ratio. The Debt-to-Equity Ratio stands at 0.40, demonstrating manageable leverage. The Return on Equity has improved significantly to 15.66%, showcasing efficient use of equity to generate profits. However, the company should continue to monitor debt levels to maintain financial stability.

Cash Flow

Carpenter Technology's cash flow position is strong, with a notable increase in Free Cash Flow to $255.6 million, reflecting substantial Free Cash Flow Growth. The Operating Cash Flow to Net Income Ratio of 1.34 highlights effective conversion of earnings into cash, supporting liquidity and operational sustainability. The positive Free Cash Flow to Net Income Ratio indicates good cash generation relative to profits.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
2.88B	2.76B	2.55B	1.84B	1.48B	2.18B
	Gross Profit
699.20M	584.30M	337.30M	149.80M	1.00M	358.70M
	EBIT
455.50M	323.10M	133.10M	-12.20M	-179.20M	158.30M
	EBITDA
528.40M	397.20M	257.60M	113.60M	-141.20M	150.90M
	Net Income Common Stockholders
268.80M	186.50M	56.40M	-49.10M	-229.60M	1.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
53.50M	199.10M	44.50M	154.20M	287.40M	193.10M
	Total Assets
3.18B	3.29B	3.05B	2.93B	2.97B	3.23B
	Total Debt
702.50M	741.40M	693.00M	701.70M	694.50M	721.80M
	Net Debt
649.00M	542.30M	648.50M	547.50M	407.10M	528.70M
	Total Liabilities
1.67B	1.66B	1.66B	1.60B	1.58B	1.78B
	Stockholders Equity
1.50B	1.63B	1.40B	1.33B	1.39B	1.45B
Cash Flow		Free Cash Flow
255.60M	178.30M	-67.60M	-85.30M	149.50M	60.40M
	Operating Cash Flow
361.10M	274.90M	14.70M	6.00M	250.00M	231.80M
	Investing Cash Flow
-104.80M	-95.90M	-82.30M	-89.10M	-78.90M	-171.20M
	Financing Cash Flow
-107.40M	-23.30M	-40.10M	-52.80M	-76.10M	107.80M

Carpenter Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 151.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRS, the sentiment is Negative. The current price of 151.3 is below the 20-day moving average (MA) of 179.43, below the 50-day MA of 188.67, and below the 200-day MA of 163.90, indicating a bearish trend. The MACD of -2.20 indicates Positive momentum. The RSI at 45.30 is Neutral, neither overbought nor oversold. The STOCH value of 33.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRS.

Carpenter Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRS	76 Outperform	$7.65B	28.91	16.82%	0.52%	5.65%	84.17%
ESAB	73 Outperform	$6.49B	24.84	16.99%	0.28%	-1.22%	28.46%
ATI	70 Outperform	$6.00B	16.43	22.82%	―	4.51%	-2.90%
AZZ	68 Neutral	$2.30B	72.97	12.97%	0.88%	5.63%	-48.03%
MLI	68 Neutral	$8.00B	13.30	23.67%	1.20%	10.19%	0.35%
WOR	66 Neutral	$2.33B	38.97	6.56%	1.44%	-69.82%	-78.10%
Sector *	62 Neutral	$7.16B	12.21	3.05%	3.43%	3.62%	-14.48%

Carpenter Technology Corporate Events

Carpenter Technology Appoints Julie Beck to Board

On February 20, 2025, Carpenter Technology Corporation appointed Julie A. Beck to its Board of Directors, effective immediately. Ms. Beck, who has extensive experience in finance and manufacturing, will serve as a Class II director until the 2027 annual meeting. Her appointment is expected to enhance the company’s growth and shareholder returns, as highlighted by Martin Inglis, Chairman of the Board.

Carpenter Technology Announces $400M Share Repurchase Plan

On February 18, 2025, Carpenter Technology hosted an Investor Update Event to discuss the company’s strategy and growth opportunities. The company has increased its aerospace and defense revenue share to 60% and expanded its market capitalization significantly. The firm is on track to generate substantial cash flow and has initiated a $400 million share repurchase program and a $40 million annual dividend, reflecting a strong shareholder return.