Kennametal (KMT) AI Stock Analysis

• Market Cap: $1.63B
• Dividend Yield: 3.73%
• Average Volume (3M): 1.30M
• Price to Earnings (P/E): 17.9
• Beta (1Y): 0.92
• Revenue Growth: -3.91%
• EPS Growth: -12.49%
• Country: US
• Employees: 8,400
• Sector: Industrials
• Sector Strength: 77
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 0.34
• Shares Outstanding: 76,021,576
• 10 Day Avg. Volume: 1,004,665
• 30 Day Avg. Volume: 1,298,034
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 1.17
• Enterprise Value/Gross Profit: 3.86
• Enterprise Value/Ebitda: 7.87
• 1Y Price Target: $22.30
• Price Target Upside: 4.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 63 Neutral
• Price Target: $22.50 ▲(5.83% Upside)

Kennametal's overall stock score reflects a stable financial foundation with operational efficiency and a balanced leverage profile. However, challenges in revenue growth, market softness, and declining free cash flow weigh on the score. The valuation is reasonable, supported by a solid dividend yield, but technical indicators suggest bearish momentum. The earnings call highlighted strategic cost savings and defense contracts, but these are tempered by broader market challenges.

Positive Factors

Earnings

KMT reported a better than expected FQ3 with adjusted EPS of $0.47, surpassing consensus estimates of $0.24.

Operational Progress

Operational progress was observed with a metal cutting decremental margin of 27%, better than expected compared to previous quarters.

Negative Factors

End Markets Weakness

Lower organic revenue growth across both Metal Cutting and Infrastructure segments reflects weakness in Europe and Transportation end markets.

Foreign Exchange Impact

Higher foreign exchange headwinds are impacting the company's financial outlook.

Macroeconomic Uncertainty

There is a struggle to see upside due to macroeconomic uncertainty with tariffs, leading to an Underperform rating.

Kennametal Business Overview & Revenue Model

Company Description

Kennametal Inc. (KMT) is a global leader in tooling and industrial materials, specializing in providing advanced materials, tooling solutions, and wear-resistant products for various industries, including aerospace, automotive, construction, energy, and metalworking. The company designs and manufactures cutting tools, tooling systems, and other engineered products that enhance productivity and efficiency in manufacturing processes. Kennametal operates through two primary segments: Metal Cutting and Infrastructure, offering a broad range of products such as inserts, tool holders, and wear parts designed to withstand extreme conditions.

How the Company Makes Money

Kennametal generates revenue primarily through the sale of its tooling and wear-resistant products. The company operates a diversified revenue model that includes direct sales to end-users, distribution agreements, and partnerships with original equipment manufacturers (OEMs). Key revenue streams come from the Metal Cutting segment, which focuses on precision cutting tools and solutions, and the Infrastructure segment, which provides products for heavy machinery and construction applications. Additionally, Kennametal benefits from ongoing relationships with customers through service agreements, providing maintenance and support for their products, which creates recurring revenue. The company's innovation in product development and strategic acquisitions also contribute significantly to its earning potential.

Kennametal Financial Statement Overview

Summary

Kennametal demonstrates a stable financial position with strengths in operational efficiency and a balanced leverage profile. However, challenges in revenue growth and profitability, as well as declining free cash flow, suggest areas for strategic focus to enhance future performance.

Income Statement

Kennametal's income statement reflects moderate stability with a gross profit margin of approximately 30.4% and a net profit margin of 4.7% in the latest year. However, the company experienced a slight decline in revenue growth rate at -1.35%, indicating challenges in expanding sales. The EBIT and EBITDA margins are relatively healthy at 7.98% and 14.92%, respectively, suggesting efficient operational management despite revenue pressures.

Balance Sheet

The balance sheet shows a solid debt-to-equity ratio of 0.47, indicating a balanced approach to leveraging. The equity ratio stands at approximately 50.4%, reflecting a strong equity base. However, the return on equity is currently at 0%, which highlights a need for improved profitability to enhance shareholder returns.

Cash Flow

Cash flow analysis reveals a decrease in free cash flow growth by 21.76%, which could impact future investments. The operating cash flow to net income ratio is 0.49, suggesting moderate efficiency in converting income to cash. The free cash flow to net income ratio of 0.57 indicates a reasonable level of cash generation relative to profits, though there is room for improvement.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.97B	1.97B	2.05B	2.08B	2.01B	1.84B
Gross Profit	598.07M	598.07M	627.09M	646.44M	647.98M	552.48M
EBITDA	293.43M	293.43M	306.63M	333.15M	371.12M	282.72M
Net Income	93.13M	93.13M	109.32M	118.46M	144.62M	54.43M
Balance Sheet
Total Assets	2.55B	2.55B	2.50B	2.55B	2.57B	2.67B
Cash, Cash Equivalents and Short-Term Investments	140.54M	140.54M	127.97M	106.02M	85.59M	154.05M
Total Debt	597.76M	597.76M	645.75M	595.86M	615.55M	600.47M
Total Liabilities	1.22B	1.22B	1.22B	1.23B	1.28B	1.30B
Stockholders Equity	1.28B	1.28B	1.25B	1.28B	1.25B	1.33B
Cash Flow
Free Cash Flow	119.35M	119.35M	169.55M	163.56M	84.52M	108.38M
Operating Cash Flow	208.32M	208.32M	277.11M	257.94M	181.44M	235.68M
Investing Cash Flow	-61.83M	-61.83M	-109.43M	-89.23M	-94.94M	-122.98M
Financing Cash Flow	-133.92M	-133.92M	-141.75M	-143.11M	-150.74M	-574.25M

Kennametal Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KMT, the sentiment is Negative. The current price of 21.26 is above the 20-day moving average (MA) of 21.18, below the 50-day MA of 22.87, and below the 200-day MA of 22.55, indicating a neutral trend. The MACD of -0.42 indicates Negative momentum. The RSI at 43.17 is Neutral, neither overbought nor oversold. The STOCH value of 71.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KMT.

Kennametal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNA	78 Outperform	$16.97B	17.24	18.18%	2.65%	-0.76%	-2.62%
LECO	78 Outperform	$13.39B	27.21	37.35%	1.22%	0.24%	0.05%
RBC	75 Outperform	$12.31B	48.76	8.56%	―	5.48%	16.88%
TKR	73 Outperform	$5.38B	17.57	10.52%	1.80%	-2.01%	-9.95%
SWK	69 Neutral	$11.50B	22.74	5.38%	4.59%	-2.71%	―
Sector *	64 Neutral	$10.74B	15.62	8.14%	2.00%	2.79%	-14.82%
KMT	63 Neutral	$1.63B	17.93	7.35%	3.73%	-3.91%	-12.49%

Kennametal Corporate Events

Kennametal Declares Quarterly Cash Dividend

On July 27, 2025, Steven H. Wunning announced he will not seek re-election to Kennametal Inc.’s Board of Directors and will retire at the October 2025 Annual Meeting of Shareowners, ending his tenure since 2005 and his role as Chairman of the Audit Committee. On July 29, 2025, Kennametal’s Board declared a quarterly cash dividend of $.20 per share, payable on August 26, 2025, to shareholders recorded by August 12, 2025.

Kennametal Sells Subsidiary to Private Equity Firm

On June 6, 2025, Kennametal Inc. announced the sale of its subsidiary, Kennametal Stellite, L.P., in Goshen, IN, to a Chicago-based private equity firm. The transaction, which brought in $19 million, is part of Kennametal’s strategy to improve its sales mix and focus on long-term strategic priorities. The subsidiary accounted for less than 2% of the company’s total sales and was considered immaterial to its profitability. The proceeds from the sale are intended for general corporate purposes, with potential additional earnings based on future performance.