Kennametal Inc (KMT)
NYSE:KMT
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Kennametal
(NYSE:KMT)
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Rating:64Neutral
Price Target:
$40.00
▲(2.70% Upside)
Action:Reiterated
Date:05/28/26
The score is driven primarily by improving profitability and a manageable balance sheet, offset by notably weak and pressured cash generation (working-capital/tungsten effects). Valuation is supportive with a low P/E and a solid dividend yield, while technicals point to neutral-to-soft momentum. The latest earnings update is operationally positive on guidance and margins, but near-term cash flow outlook and paused buybacks constrain the overall rating.
Positive Factors
Margin Expansion & Profitability
Sustained margin expansion and rising adjusted EPS indicate improved pricing power and operational leverage. Higher gross and EBITDA margins increase the company's ability to generate lasting earnings through cost takeouts and pricing, supporting durable profitability even if end-market growth moderates.
Negative Factors
Weak Cash Generation & Conversion
Material deterioration in operating and free cash flow constrains internal funding for capex, M&A and shareholder returns. With cash conversion well below historical norms, the business is more reliant on liquidity facilities or refinancing to support operations, elevating structural risk if revenue or margins soften.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Expansion & Profitability
Sustained margin expansion and rising adjusted EPS indicate improved pricing power and operational leverage. Higher gross and EBITDA margins increase the company's ability to generate lasting earnings through cost takeouts and pricing, supporting durable profitability even if end-market growth moderates.
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
$2.50B
Dividend Yield2.74%
Average Volume (3M)1.46M
Price to Earnings (P/E)18.2
Beta (1Y)0.76
Revenue Growth7.16%
EPS Growth28.79%
CountryUS
Employees8,400
SectorIndustrials
Sector Strength72
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)1.79
Shares Outstanding76,210,106
10 Day Avg. Volume1,466,623
30 Day Avg. Volume1,464,395
Financial Highlights & Ratios
PEG Ratio-1.55
Price to Book (P/B)1.38
Price to Sales (P/S)0.90
P/FCF Ratio14.86
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue1.43
Enterprise Value/Gross Profit4.49
Enterprise Value/Ebitda8.59
Forecast
1Y Price Target
$37.79Price Target Upside-2.99% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering8
EPS Forecast (FY)3.91
Revenue Forecast (FY)$2.34B
Kennametal Business Overview & Revenue Model
Company Description
Kennametal Inc. engages in development and application of tungsten carbides, ceramics, and super-hard materials and solutions for use in metal cutting and extreme wear applications to enable customers work against corrosion and high temperatures c...
How the Company Makes Money
Kennametal makes money primarily by selling industrial consumables and engineered products to manufacturers and other end users, with revenue largely tied to production activity and machining demand. Key revenue streams include: (1) Metal-cutting ...
Kennametal Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial performance: strong top-line growth, margin expansion, consecutive quarters of organic growth, share gains in key end markets and an upward revision to guidance driven by price realization and volume. However, material near-term negatives include significant working capital and cash flow strain driven by unprecedented tungsten price volatility, some regional/market softness (EMEA, transportation), higher inflationary and compensation pressures, and a temporary pause/delay in repurchases and some restructuring actions. Management characterizes many negatives as temporary or manageable while emphasizing vertical-integration advantages and a focus on growth.Positive Updates
Revenue Growth and Outlook Raise
Reported sales up 22% year-over-year (organic +19%, FX +5%); company raised FY '26 sales outlook to $2.33B–$2.35B and raised adjusted EPS guidance to $3.75–$4.00 driven by additional pricing and volume.
Negative Updates
Working Capital and Cash Flow Pressure
Year-to-date operating cash flow decreased to $70M from $130M prior year; free operating cash flow YTD down to $18M from $63M prior year, driven by inventory valuation increases tied to rising tungsten costs.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue Growth and Outlook Raise
Reported sales up 22% year-over-year (organic +19%, FX +5%); company raised FY '26 sales outlook to $2.33B–$2.35B and raised adjusted EPS guidance to $3.75–$4.00 driven by additional pricing and volume.
Read all positive updates
Company Guidance
Kennametal raised FY‑2026 guidance to sales of $2.33–$2.35 billion with volume growth of 2–3%, net price and tariff surcharges of ~16% for the year (about 35% in Q4) and an FX tailwind of ~2%, and now expects adjusted EPS of $3.75–$4.00 (which includes roughly $2.45 of price‑raw timing benefit, the majority in Infrastructure, and is ~$1.50 higher than prior guidance). Full‑year capex is expected to be ~$85 million and free operating cash flow is forecast to be approximately negative 30% of adjusted net income due to working‑capital pressure from higher tungsten costs (primary working capital YTD rose to $819 million, or 32.4% of sales); YTD operating cash flow was $70M (vs. $130M prior year) and YTD FOCF was $18M (vs. $63M). Liquidity remains ample with combined cash and revolver availability of ~$742M; share repurchases are paused (to date $70M repurchased under a $200M authorization) and $15M was returned as dividends in the quarter. For FY‑27 management assumes elevated tungsten prices with carryover of Q4 pricing (price‑raw benefits persisting into H1, concentrated in Q1), targets roughly $110M of cost takeout by end of FY‑27 (up $10M from Investor Day), and anticipates a ~$20M benefit from a performance‑comp compensation reset plus ~$10M of additional restructuring/CI savings; the outlook excludes any impact from the Middle East conflict.Kennametal Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.14B | 1.97B | 2.05B | 2.08B | 2.01B | 1.84B |
| Gross Profit | 679.66M | 598.07M | 627.09M | 646.44M | 647.98M | 552.48M |
| EBITDA | 355.41M | 293.43M | 305.61M | 322.14M | 364.32M | 237.52M |
| Net Income | 137.00M | 93.13M | 109.32M | 118.46M | 144.62M | 54.43M |
Balance Sheet | ||||||
| Total Assets | 2.73B | 2.55B | 2.50B | 2.55B | 2.57B | 2.67B |
| Cash, Cash Equivalents and Short-Term Investments | 106.85M | 140.54M | 127.97M | 106.02M | 85.59M | 154.05M |
| Total Debt | 659.57M | 643.36M | 645.75M | 639.42M | 663.28M | 651.49M |
| Total Liabilities | 1.33B | 1.22B | 1.22B | 1.23B | 1.28B | 1.30B |
| Stockholders Equity | 1.35B | 1.28B | 1.25B | 1.28B | 1.25B | 1.33B |
Cash Flow | ||||||
| Free Cash Flow | 73.13M | 119.35M | 169.55M | 163.56M | 84.52M | 108.38M |
| Operating Cash Flow | 148.28M | 208.32M | 277.11M | 257.94M | 181.44M | 235.68M |
| Investing Cash Flow | -53.40M | -61.83M | -109.43M | -89.23M | -94.94M | -122.98M |
| Financing Cash Flow | -86.04M | -133.92M | -141.75M | -143.11M | -150.74M | -574.25M |
Kennametal Technical Analysis
Negative
38.95
Price Trends
36.90
Negative
36.76
Negative
30.27
Positive
Market Momentum
-0.98
Positive
37.60
Neutral
13.48
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 38.95 is above the 20-day moving average (MA) of 36.24, above the 50-day MA of 36.90, and above the 200-day MA of 30.27, indicating a neutral trend. The MACD of -0.98 indicates Positive momentum. The RSI at 37.60 is Neutral, neither overbought nor oversold. The STOCH value of 13.48 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $19.23B | 18.83 | 17.48% | 2.52% | 2.99% | 1.23% | |
74 Outperform | $18.09B | 62.71 | 8.90% | ― | 14.34% | 18.07% | |
71 Outperform | $8.89B | 28.88 | 9.77% | 1.61% | 3.31% | -5.18% | |
70 Outperform | $14.16B | 26.32 | 37.29% | 1.22% | 7.72% | 19.51% | |
64 Neutral | $2.50B | 18.24 | 10.46% | 2.74% | 7.16% | 28.79% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $12.35B | 32.48 | 4.12% | 4.42% | -0.06% | 3.45% |
* Industrials Sector Average
KMT
Kennametal
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Kennametal Corporate Events
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...
Dividends
Kennametal Declares Quarterly Cash Dividend, Signaling Stability
Positive
May 1, 2026
On April 28, 2026, Kennametal Inc.’s Board of Directors declared a quarterly cash dividend of $0.20 per share, reinforcing the company’s ongoing practice of returning capital to shareholders. The dividend will be paid on May 26, 2026, ...
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.