Did Kennametal’s (KMT) Hexagon Tool Library Integration Quietly Recast Its Digital Manufacturing Ambitions?

• Kennametal Inc. recently announced a new integration with Hexagon's cloud-based Tool Library, allowing machinists to import verified Kennametal solid carbide drill and end mill data directly into Hexagon's WORKNC CAM software for faster setup and improved machining accuracy using scalable 3D digital tooling models.
• This move pushes Kennametal deeper into digital manufacturing solutions by turning its tooling portfolio into instantly usable, cloud-delivered data, potentially making its products more embedded in customers' everyday CAM workflows.
• Next, we’ll examine how deeper integration of Kennametal’s digital tooling into Hexagon’s WORKNC ecosystem could influence the company’s broader investment narrative.

AI is about to change healthcare. These 29 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

Kennametal Investment Narrative Recap

To own Kennametal, you need to believe its cutting tools and related solutions can grow earnings despite slow revenue expansion, cost pressures and structurally challenged end markets. The Hexagon integration modestly supports the near term catalyst of earnings growth by nudging Kennametal toward digital manufacturing, but it does not remove the bigger risk that volumes in core markets and traditional tooling could stagnate further.

The recent decision to reaffirm a regular US$0.20 quarterly dividend throughout 2025 is the clearest link to this story, because it signals management’s confidence in cash generation even while revenues hover near US$2 billion and margins remain thin. For investors watching the Hexagon partnership, the key question is whether incremental digital initiatives like this can meaningfully support that dividend and earnings trajectory if traditional end market demand remains under pressure.

Yet investors should also be aware that if manufacturing trends keep shifting toward digitalization faster than Kennametal adapts, then ...

Read the full narrative on Kennametal (it's free!)

Kennametal’s narrative projects $2.1 billion revenue and $120.7 million earnings by 2028.

Uncover how Kennametal's forecasts yield a $25.25 fair value, a 12% downside to its current price.

Exploring Other Perspectives

Two fair value estimates from the Simply Wall St Community span a wide range, from US$25.25 up to about US$77.09, showing how far apart individual views can be. You can weigh these against concerns about long term stagnation in Kennametal’s core end markets and consider how that might shape the company’s performance over time.

Explore 2 other fair value estimates on Kennametal - why the stock might be worth 12% less than the current price!

Build Your Own Kennametal Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kennametal research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Kennametal research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kennametal's overall financial health at a glance.

Looking For Alternative Opportunities?

The market won't wait. These fast-moving stocks are hot now. Grab the list before they run:

• Find companies with promising cash flow potential yet trading below their fair value.
• Outshine the giants: these 25 early-stage AI stocks could fund your retirement.
• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com