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CRS: Buybacks And Rising Operating Income Will Drive Future Upside

Analysts Lift Carpenter Technology Price Target as Valuation Improves on Upbeat Guidance

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CRS
AnalystConsensusTarget
Not Invested
Published 27 Aug 2024

Update shared on 18 Dec 2025

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AnalystConsensusTarget's Fair Value
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1Y
92.5%
7D
1.7%

Analysts have modestly raised their price target on Carpenter Technology, reflecting slightly stronger long term revenue growth assumptions and a lower discount rate. This was offset by a marginally softer profit margin outlook and a small compression in projected future valuation multiples.

What's in the News

  • Completed a share repurchase of 775,000 shares, representing 1.56% of shares outstanding, for a total of $150.99 million under the buyback announced on July 25, 2024 (Key Developments).
  • Between July 1, 2025 and September 30, 2025, repurchased 200,000 shares, or 0.4% of shares outstanding, for $49.12 million as part of the same buyback program (Key Developments).
  • Issued earnings guidance for the second quarter of fiscal 2026, forecasting operating income between $152 million and $156 million (Key Developments).
  • Raised fiscal 2026 operating income outlook to a range of $660 million to $700 million, described as a 26% to 33% increase over fiscal 2025, attributed to higher volume, pricing, and productivity (Key Developments).
  • Set a fiscal 2027 operating income target of $765 million to $800 million, with the possibility of exceeding that level (Key Developments).

Valuation Changes

  • Fair Value: Unchanged at $382.37 per share, reflecting offsetting adjustments in underlying assumptions.
  • Discount Rate: Decreased slightly from 7.79% to 7.60%, lifting the present value of projected cash flows.
  • Revenue Growth: Increased marginally from 7.79% to 7.80% per year, indicating a slightly stronger long term growth outlook.
  • Net Profit Margin: Edged down slightly from 19.74% to 19.73%, incorporating a modestly softer margin profile.
  • Future P/E: Declined slightly from 32.81x to 32.64x, implying a small compression in expected valuation multiples.

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