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Kennametal
(NYSE:KMT)
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Rating:58Neutral
Price Target:
$36.00
▲(2.19% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by the sharp deterioration in cash flow and working-capital pressure despite strong reported profitability and improved returns, which raises quality-of-earnings risk. Guidance and operational momentum are supportive but tempered by management’s acknowledgment that timing benefits will roll off and that tungsten-related dynamics are straining liquidity. Technicals are mixed and valuation is reasonable with a moderate P/E and a supportive dividend yield.
Positive Factors
Strategic wins and diversified end-market exposure
Kennametal’s recent strategic product wins across CFRP aerospace tooling, AI data centers, defense and energy diversify revenue sources and shift mix toward higher‑value, faster‑growing end markets. This reduces cyclicality, supports above‑market organic growth and creates durable addressable market expansion for tooling and wear solutions.
Negative Factors
Negative operating cash flow and free cash flow
A large deterioration in cash conversion undermines reported profitability: net income and margins improved but cash generation collapsed, creating quality‑of‑earnings risk. If weak OCF/FCF persists, the company will face structural liquidity pressure and greater dependence on debt or capital markets to fund operations.
Read all positive and negative factors
Positive Factors
Negative Factors
Strategic wins and diversified end-market exposure
Kennametal’s recent strategic product wins across CFRP aerospace tooling, AI data centers, defense and energy diversify revenue sources and shift mix toward higher‑value, faster‑growing end markets. This reduces cyclicality, supports above‑market organic growth and creates durable addressable market expansion for tooling and wear solutions.
Read all positive factors
Kennametal Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Shows operating profit and margins for each Kennametal segment, highlighting which businesses deliver the best returns and which are margin pressure points. Helps spot where pricing power, cost control, or scale are improving profitability and where raw material costs, labor, or restructuring could erode earnings.
Shows operating profit and margins for each Kennametal segment, highlighting which businesses deliver the best returns and which are margin pressure points. Helps spot where pricing power, cost control, or scale are improving profitability and where raw material costs, labor, or restructuring could erode earnings.
Data provided by:
The Fly
The FlyKennametal (KMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.59B
Dividend Yield2.36%
Average Volume (3M)971.22K
Price to Earnings (P/E)19.0
Beta (1Y)0.78
Revenue Growth7.16%
EPS Growth28.79%
CountryUS
Employees8,124
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)1.79
Shares Outstanding76,210,106
10 Day Avg. Volume832,511
30 Day Avg. Volume971,223
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)1.66
Price to Sales (P/S)1.13
P/FCF Ratio-33.01
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$33.17Price Target Upside-5.86% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering8
EPS Forecast (FY)3.83
Revenue Forecast (FY)$2.70B
Kennametal Business Overview & Revenue Model
Company Description
Kennametal Inc. is a global leader in developing and applying cutting-edge materials, including tungsten carbides, ceramics, and super-hard compounds. Their core mission is to provide robust solutions for demanding industrial applications, specifi...
How the Company Makes Money
Kennametal primarily makes money by selling engineered products and solutions used to cut, shape, and wear-protect materials in industrial production and heavy-use environments. Its core revenue streams include (1) metal cutting products—such as i...
Kennametal Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call presented strong operational and financial momentum with record quarterly margins, EPS and sustained organic growth, supported by strategic wins in higher-growth markets (aerospace CFRP, AI data centers, defense). However, a sizable portion of near-term upside was driven by favorable raw-material timing effects and elevated tungsten pricing created significant working capital and cash flow pressure, higher interest expense and dependency on pricing/surcharges. Management provided a credible FY'27 outlook (sales $3.33B–$3.45B, EPS $4.15–$5.15) and actions to shore up liquidity, but investors should monitor the roll-off of timing benefits, tungsten price stability, and cash conversion in the back half of the year.Positive Updates
Strong Full-Year Revenue and Organic Growth
Full-year organic sales increased 19% year-over-year, driven by price realization and modest volume gains; management highlights broad-based growth across end markets and strategic wins in AI data centers, aerospace & defense, mining and next-generation vehicle powertrains.
Negative Updates
Negative Free Operating Cash Flow and Working Capital Pressure
Full-year free operating cash flow was negative $79M (prior year +$121M) and operating cash flow was negative $4M; company attributes the cash drag primarily to increased working capital requirements driven by elevated tungsten prices and inventory valuation timing.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Full-Year Revenue and Organic Growth
Full-year organic sales increased 19% year-over-year, driven by price realization and modest volume gains; management highlights broad-based growth across end markets and strategic wins in AI data centers, aerospace & defense, mining and next-generation vehicle powertrains.
Read all positive updates
Company Guidance
Management guided FY'27 sales of $3.33–$3.45B with volume up 1%–4%, price and tariff surcharges of ~40%–43% (Q1 surcharges 50%–53%), neutral FX, and an adjusted EPS outlook of $4.15–$5.15 (midpoint $4.65); Q1 sales are guided to $745–$775M with Q1 EPS $2.50–$2.80 (including ~ $2.25 of favorable raw‑material timing), the company assumes tungsten remains stable, expects interest expense of ~ $50M (~ $11M in Q1), an effective tax rate of ~25%, working‑capital expenditures of ~$85M and primary working capital of ~45% of sales at year‑end, and projects free operating cash flow of ~20% of adjusted net income; the plan includes ~$10M of rollover restructuring savings, an IRA credit benefit of ~$0.17, a ~23% Bolivia FX headwind, and anticipates a Q4 EBITDA exit in the mid‑teens with volume leverage in the mid‑30s if tungsten stays at current levels.Kennametal Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.14B | 2.36B | 1.97B | 2.05B | 2.08B | 2.01B |
| Gross Profit | 679.66M | 969.96M | 598.07M | 627.09M | 646.44M | 647.98M |
| EBITDA | 360.00M | 633.04M | 293.43M | 305.61M | 322.14M | 364.32M |
| Net Income | 137.00M | 342.39M | 93.13M | 109.32M | 118.46M | 144.62M |
Balance Sheet | ||||||
| Total Assets | 2.73B | 3.17B | 2.55B | 2.50B | 2.55B | 2.57B |
| Cash, Cash Equivalents and Short-Term Investments | 106.85M | 95.79M | 140.54M | 127.97M | 106.02M | 85.59M |
| Total Debt | 659.57M | 717.45M | 643.36M | 645.75M | 639.42M | 663.28M |
| Total Liabilities | 1.33B | 1.56B | 1.22B | 1.22B | 1.23B | 1.28B |
| Stockholders Equity | 1.35B | 1.61B | 1.28B | 1.25B | 1.28B | 1.25B |
Cash Flow | ||||||
| Free Cash Flow | 73.13M | -80.91M | 119.35M | 169.55M | 163.56M | 84.52M |
| Operating Cash Flow | 148.28M | -4.01M | 208.32M | 277.11M | 257.94M | 181.44M |
| Investing Cash Flow | -53.40M | -71.30M | -61.83M | -109.43M | -89.23M | -94.94M |
| Financing Cash Flow | -86.04M | 31.63M | -133.92M | -141.75M | -143.11M | -150.74M |
Kennametal Technical Analysis
Negative
35.23
Price Trends
34.31
Negative
35.67
Negative
33.49
Negative
Market Momentum
-0.14
Positive
43.23
Neutral
9.17
Positive
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 35.23 is above the 20-day moving average (MA) of 34.44, above the 50-day MA of 34.31, and above the 200-day MA of 33.49, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 43.23 is Neutral, neither overbought nor oversold. The STOCH value of 9.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KMT.
Kennametal Risk Analysis
Kennametal disclosed 9 risk factors in its most recent earnings report. Kennametal reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kennametal Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $21.23B | 20.60 | 17.41% | 2.34% | 4.02% | 4.39% | |
72 Outperform | $9.56B | 31.12 | 8.13% | 1.00% | 3.31% | -5.18% | |
70 Outperform | $14.24B | 25.87 | 37.21% | 1.24% | 9.14% | 12.52% | |
70 Outperform | $17.44B | 54.21 | 9.66% | ― | 17.31% | 27.05% | |
68 Neutral | $14.28B | 23.18 | 6.90% | 3.64% | 0.57% | 29.85% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $2.59B | 18.98 | 10.46% | 2.27% | 7.16% | 28.79% |
* Industrials Sector Average
KMT
Kennametal
33.13
13.44
68.23%
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Kennametal Corporate Events
Dividends
Kennametal Declares Quarterly Cash Dividend to Shareholders
Positive
Jul 31, 2026
On July 28, 2026, Kennametal Inc.’s Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend will be paid on August 25, 2026 to shareholders of record as of the close of business on August 11, 2026.This dividend...
Business Operations and StrategyExecutive/Board Changes
Kennametal Appoints New Chief Human Resources Officer
Positive
Jun 30, 2026
On June 30, 2026, Kennametal announced that Amanda Cole has been appointed Vice President and Chief Human Resources Officer, effective July 21, 2026, succeeding longtime HR chief Judith Bacchus, who plans to retire around October 1, 2026 after mor...
Private Placements and FinancingRegulatory Filings and Compliance
Kennametal Updates Credit Agreements and Financing Arrangements
Neutral
Jun 2, 2026
Kennametal disclosed that details related to a First Amendment, a Revolving Credit Agreement and a Term Loan Credit Agreement are being incorporated by reference into its current disclosure. This brief filing note indicates that the company is rel...
Private Placements and FinancingRegulatory Filings and Compliance
Kennametal Announces Underwritten Notes Offering and Agreement
Neutral
May 28, 2026
On May 19, 2026, Kennametal entered into an underwriting agreement with BofA Securities, Inc., BNP Paribas Securities Corp. and PNC Capital Markets LLC, acting as representatives of a group of underwriters, to sell a series of notes. The agreement...
Business Operations and Strategy
Kennametal Announces Pricing, Expiration of 2028 Notes Tender
Positive
May 27, 2026
On May 26, 2026, Pittsburgh‑based Kennametal Inc. announced the pricing terms for its previously launched cash tender offer to repurchase any and all of its outstanding 4.625% senior notes due 2028. The consideration was set by reference to ...
Business Operations and StrategyPrivate Placements and Financing
Kennametal Launches Senior Notes Offering, Debt Tender Plan
Neutral
May 19, 2026
On May 19, 2026, Kennametal Inc. launched an underwritten public offering of senior notes, with final size and terms to be set based on market conditions, as part of a broader balance sheet initiative. Concurrently, the company began a cash tender...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.