Carpenter Technology (CRS) AI Stock Analysis

• Market Cap: $13.59B
• Dividend Yield: 0.29%
• Average Volume (3M): 1.06M
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.45
• Revenue Growth: 7.40%
• EPS Growth: 168.67%
• Country: US
• Employees: 4,600
• Sector: Industrials
• Sector Strength: 93
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.88
• Shares Outstanding: 49,779,343
• 10 Day Avg. Volume: 740,432
• 30 Day Avg. Volume: 1,056,596
• PEG Ratio: 1.18
• Price to Book (P/B): 7.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 61.10
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 1.27
• Enterprise Value/Gross Profit: 19.25
• Enterprise Value/Ebitda: 6.93
• 1Y Price Target: $312.00
• Price Target Upside: 12.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: $310.00 ▲(12.14%Upside)

Carpenter Technology's strong financial performance and record-breaking earnings quarter are the primary drivers of its stock score. The company has shown significant growth in profitability and set higher guidance for the year. Technical analysis reveals strong bullish momentum, although the stock may be overbought, posing short-term risks. The valuation suggests the stock may be overpriced, limiting its appeal for value investors.

Positive Factors

Operational Efficiency

Carpenter Technology's continuous improvement culture has enhanced margins, safety, and operational flow, contributing to its competitive advantage.

Pricing Power

Analyst highlights Carpenter's strong pricing power, supported by a robust order backlog and significant barriers to entry, driving an Overweight rating.

Negative Factors

Cash Flow

Free cash flow was negatively impacted year-over-year due to higher discretionary pension contributions and increased capital expenditures.

Supply Challenges

Despite the investment in the Athens facility, there remains a shortage of alloy materials to meet the demand from aerospace, defense, and medical sectors.

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 specialty alloys and engineered products. The company’s revenue streams are largely driven by its ability to meet the specific material requirements of its clients across various high-value industries. Carpenter Technology generates income by partnering with major corporations in sectors such as aerospace and defense to supply materials that are critical to the performance and safety of their products. Additionally, the company invests in research and development to innovate new materials and solutions, enhancing its competitive position in the market. Carpenter Technology also benefits from long-term contracts and relationships with key customers, contributing to consistent revenue flows.

Carpenter Technology Financial Statement Overview

Summary

Carpenter Technology displays strong financial health with improvements in profitability and cash flow generation. Revenue and profit margins have improved significantly, supported by a stable capital structure with manageable leverage and strong equity. However, liquidity concerns due to decreasing cash reserves and increasing capital expenditures need monitoring.

Income Statement

The income statement shows strong revenue growth with a 5.8% increase in TTM compared to the previous year. Gross profit margin improved to 25.6% in TTM, indicating better cost management or pricing strategies. Net profit margin has risen significantly to 12.3%, highlighting improved profitability. Both EBIT and EBITDA margins have shown robust growth, reaching 17.1% and 18.7% respectively, reinforcing operational efficiency.

Balance Sheet

The balance sheet is stable with a moderate debt-to-equity ratio of 0.39 in TTM, indicating manageable leverage. Return on Equity (ROE) improved significantly to 20.1%, showcasing increased returns on shareholder investment. The equity ratio remains healthy at 53.0%, reflecting a strong capital structure. However, the decrease in cash reserves could pose liquidity concerns.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth of 27.7% in TTM, driven by improved operating cash flows. The operating cash flow to net income ratio of 0.98 indicates efficient conversion of net income into cash. Additionally, free cash flow to net income ratio of 0.64 suggests healthy cash generation relative to profitability. However, capital expenditures are increasing, which could impact future cash flows.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	2.76B	2.55B	1.84B	1.48B	2.18B
Gross Profit	584.30M	337.30M	149.80M	1.00M	358.70M
EBITDA	397.20M	257.60M	113.60M	-141.20M	150.90M
Net Income	186.50M	56.40M	-49.10M	-229.60M	1.50M
Balance Sheet
Total Assets	3.29B	3.05B	2.93B	2.97B	3.23B
Cash, Cash Equivalents and Short-Term Investments	199.10M	44.50M	154.20M	287.40M	193.10M
Total Debt	741.40M	693.00M	701.70M	694.50M	721.80M
Total Liabilities	1.66B	1.66B	1.60B	1.58B	1.78B
Stockholders Equity	1.63B	1.40B	1.33B	1.39B	1.45B
Cash Flow
Free Cash Flow	178.30M	-67.60M	-85.30M	149.50M	60.40M
Operating Cash Flow	274.90M	14.70M	6.00M	250.00M	231.80M
Investing Cash Flow	-95.90M	-82.30M	-89.10M	-78.90M	-171.20M
Financing Cash Flow	-23.30M	-40.10M	-52.80M	-76.10M	107.80M

Carpenter Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 276.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 276.44 is below the 20-day moving average (MA) of 277.77, above the 50-day MA of 257.79, and above the 200-day MA of 201.94, indicating a neutral trend. The MACD of 5.79 indicates Positive momentum. The RSI at 57.80 is Neutral, neither overbought nor oversold. The STOCH value of 43.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRS.

Carpenter Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AZZ	81 Outperform	$3.28B	12.68	23.85%	0.65%	1.70%	684.20%
CRS	77 Outperform	$13.59B	38.80	21.78%	0.29%	7.40%	168.67%
ATI	77 Outperform	$13.16B	34.37	25.42%	―	6.82%	3.49%
ESAB	75 Outperform	$8.01B	29.71	16.64%	0.26%	-1.85%	16.06%
MLI	74 Outperform	$9.77B	14.02	25.98%	1.01%	19.42%	30.15%
WOR	74 Outperform	$3.11B	32.84	10.52%	1.09%	-60.43%	-14.19%
Sector *	61 Neutral	C$6.54B	7.73	2.76%	2.57%	6.48%	-23.55%

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.