Update shared on 23 Nov 2025
Fair value Increased 6.88%Analysts have increased their fair value estimate for Kennametal from $23.63 to $25.25 per share, citing improved revenue growth and profit margins, as well as recent positive developments in tungsten pricing and stronger-than-expected financial results.
Analyst Commentary
Recent analyst updates on Kennametal reflect a mix of optimism about improved fundamentals and continued caution regarding long-term growth prospects. Price target increases and raised guidance highlight positive momentum. Some analysts maintain a careful stance amid ongoing uncertainties.
Bullish Takeaways- Bullish analysts have raised their price targets in response to stronger-than-expected quarterly results. Organic sales growth marks a positive shift after multiple years of stagnation.
- Profitability outpaced consensus expectations, as segment EBIT was reported significantly above estimates. This indicates effective execution and operational leverage.
- Improved tungsten prices are seen as a catalyst for accelerating growth and provide a favorable backdrop for Kennametal's core business lines.
- Management's decision to raise long-term earnings guidance is viewed as a positive signal of confidence in sustained pricing power and future margin expansion.
- Some bearish analysts continue to caution that, despite recent positive results, consistent growth momentum remains unproven. Further quarters of outperformance are needed for a more constructive outlook.
- The company's outlook is still subject to external risks tied to commodity price fluctuations and global demand. These could weigh on execution and future valuations.
- Certain analysts maintain neutral or even cautious ratings. They express concerns that current positive factors may already be priced into the shares at new target levels.
What's in the News
- Kennametal Inc. provided new earnings guidance for the second quarter of fiscal year 2026, projecting sales between $500 million and $520 million. (Company guidance)
- The company completed another tranche of its share buyback program, repurchasing 474,859 shares for $9.99 million during the quarter. This brings total buybacks to 2,966,554 shares for $69.91 million since February 2024. (Company announcement)
- Full-year fiscal 2026 earnings guidance was raised by the company, with sales now expected between $2.1 billion and $2.17 billion. This reflects strong first quarter performance and better-than-expected share gains. (Company guidance)
Valuation Changes
- Fair Value Estimate: Increased from $23.63 to $25.25 per share. This reflects a modest upward revision.
- Discount Rate: Decreased slightly from 9.15% to 9.12%, which indicates a minor reduction in risk assumptions.
- Revenue Growth: Improved from 3.86% to 4.71%. This signals higher expectations for top-line expansion.
- Net Profit Margin: Risen from 5.03% to 6.12%, suggesting better anticipated profitability.
- Future P/E Ratio: Decreased from 19.53x to 16.94x. This points to a less aggressive valuation on future earnings.
Disclaimer
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