| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 88 | 6.7x | 17.8x | Top tier | |
Growth | 88 | 19.8% | 7.1% | Top tier | |
Quality | 66 | 17.1% | 4.5% | Around median | |
Safety | 68 | 1.0x | 2.6x | Top tier | |
Capital Return | 27 | 2.72% | 2.12% | Bottom tier | |
Momentum | 37 | 53.4% | 2.9% | Bottom tier | |
Sentiment | 67 | 6 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Kennametal produces cutting, machining, and wear-resistant material solutions for customers in aerospace and defense, energy, transportation, general engineering, earthworks, mining, and construction. It operates through the Metal Cutting and Infrastructure segments, leveraging materials science, application engineering, process technologies, and a global supply chain; its model is based on selling industrial tools and products, including diamond-coated cutting tools for composites, along with recurring replacement purchases after tools wear out. In fiscal 2026, the company generated revenue of $2.4 billion, gross profit of $970.0 million, and net income of $342.4 million, equivalent to a gross margin of approximately 40.4% and a net income margin of approximately 14.3%.
In quarter 4 of fiscal 2026, revenue was $736.6 million, gross profit was $433.6 million, and net income was $227.0 million, equivalent to a gross margin of approximately 58.9% and a net income margin of approximately 30.8%. Organic sales rose 42%, comprising growth of 22% in Metal Cutting and 74% in Infrastructure, while record adjusted margins reached 46.8% for earnings before interest, taxes, depreciation, and amortization and 41.5% for operating income. However, $252 million of the quarterly profitability improvement came from favorable timing between raw material pricing and costs, including $54 million in Metal Cutting and $198 million in Infrastructure, so the quarter's margins do not by themselves represent a sustainable level.
For fiscal 2026, organic sales grew 19%, adjusted earnings per share increased to $4.57 from $1.34, and the adjusted earnings before interest, taxes, depreciation, and amortization margin rose to 26.9% from 15.2%. Growth included all end markets at constant currency, but operating cash flow was negative $4 million and free operating cash flow was negative $79 million because of increased working capital associated with higher tungsten prices. Kennametal returned $71 million to shareholders, including $61 million in dividends and $10 million in share repurchases.
Automated analysis for informational purposes only — not investment advice.
The average analyst target is $36.38, with a "Neutral" consensus and a wide range of $30 to $47.5; the average is approximately 17% below the top of the 52-week range of $43.81, while the highest target exceeds that peak by approximately 8%. This divergence reflects the difficulty of separating underlying operating earnings from the tungsten timing benefit: adjusted earnings per share were $4.57 in fiscal 2026, but management expects $4.15 to $5.15 in fiscal 2027 as the raw material price-versus-cost benefit declines from $3.11 to $0.39 of earnings per share. Therefore, the sustainable valuation depends on the ability of volume growth, share gains, and savings to offset margin normalization, higher interest expense, and working capital pressure.
Figures in the text are as of 2026-09-01; the live price is shown at the top of the page.
Organic sales rose 42%, while revenue reached $736.6 million and net income reached $227.0 million in quarter 4 of fiscal 2026. The adjusted earnings before interest, taxes, depreciation, and amortization margin reached 46.8%, while the adjusted operating margin was 41.5%. The largest driver was a $252 million benefit from the timing of raw material pricing relative to costs, along with higher sales and production and quarterly restructuring savings of approximately $5 million. Management therefore expects the earnings before interest, taxes, depreciation, and amortization margin to return to the mid-teens in quarter 4 of fiscal 2027 after the tungsten impact normalizes.
The company expects revenue of between $3.33 billion and $3.45 billion in fiscal 2027, with volume growth of between 1% and 4% and additional price increases and tariffs of between 40% and 43%. Adjusted earnings per share are expected to range from $4.15 to $5.15, with a midpoint of $4.65 versus $4.57 in fiscal 2026. The outlook assumes stable tungsten prices and no material impact on customer activity from the conflict in the Middle East. Management also expects interest expense of approximately $50 million and an effective tax rate of approximately 25%.
Kennametal raised prices in response to tungsten costs reaching historically high levels, and the timing difference between pricing and costs produced a positive impact of $3.11 on earnings per share in fiscal 2026. The company expects this benefit to decline to only $0.39 in fiscal 2027, concentrated in the first half and mostly disappearing by the beginning of quarter 3. Meanwhile, the higher inventory value resulted in negative free operating cash flow of $79 million in fiscal 2026. Management expects a cash outflow of approximately $200 million in quarter 1 of fiscal 2027 before cash flow turns positive in the second half.
The company's aerospace and defense business grew 43% at constant currency in quarter 4 of fiscal 2026, and management expects it to become Kennametal's third-largest end market. The company is targeting a market worth approximately $500 million for cutting tools used on carbon-fiber aerospace composites, with expected growth of 9% annually through 2028. Kennametal says consumption of diamond-coated tools for these materials is approximately twice that of tools used for aluminum and that the difficulty of reconditioning them supports replacement sales. The company also gained business with aerospace suppliers in the Americas and Europe, the Middle East, and Africa and won business from a customer that faced a supply disruption at one of its competitors.
All end markets delivered constant-currency growth in quarter 4 of fiscal 2026, led by energy at 101%, earthworks and construction at 76%, and aerospace and defense at 43%. However, the fiscal 2027 outlook is more varied than these figures, as management expects aerospace and defense to lead volume growth, followed by energy and general engineering. The company expects Earthworks to be roughly flat because of weakness in coal in the United States and China and Transportation to decline slightly as global light-vehicle production falls by approximately 1%. Kennametal is also monitoring continued competitive and seasonal pressures in road construction.
Total cash and available liquidity under the credit facility was approximately $926 million at the end of quarter 4 of fiscal 2026, including an additional $200 million from expanding the facility. A new $500 million term loan was fully available, and the company intends to draw it in the September quarter of fiscal 2027 and repay any use of the credit facility. The nearest debt maturity is now in July 2029, and public bond maturities extend to 2031 and 2036. In fiscal 2026, the company returned $71 million to shareholders, including $61 million in dividends and $10 million in share repurchases, despite negative free operating cash flow of $79 million.
