Does Consecutive Caterpillar Awards Signal a Competitive Edge for Kennametal (KMT) in Industrial Markets?

• In October 2025, Kennametal Inc. was recognized for the second consecutive year as one of Caterpillar's top indirect suppliers, highlighting its strength in metal cutting solutions, productivity, and technical support.
• This recognition underscores Kennametal’s role in supporting major infrastructure and electrification projects worldwide, showing strong alignment with Caterpillar’s long-term priorities.
• We'll now explore how Kennametal's back-to-back supplier recognition from Caterpillar may reinforce its position in key industrial markets.

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Kennametal Investment Narrative Recap

For those considering Kennametal as an investment, belief in the company’s long-term relevance in global infrastructure and electrification projects is key, especially as these sectors remain core growth drivers. While the recent supplier recognition from Caterpillar signals strong operational alignment and may foster incremental opportunity, there is little indication it will shift the primary near-term catalyst: the push for sustainable revenue growth in the face of soft end-market demand. The biggest ongoing risk is continued volume decline across critical segments like Transportation and Oil & Gas; this remains unmitigated by the Caterpillar news.

Among recent announcements, Kennametal’s August 2025 quarterly sales update stands out, as full-year revenues and earnings have both contracted year-over-year despite efficiency efforts. This persistent stagnation remains a headwind, even as enterprise accolades may help reinforce customer relationships and underpin future bidding activity. Ultimately, attention stays fixed on whether management’s cost-saving initiatives can outpace the structural demand challenges.

Yet in contrast to the optimism of supplier awards, there are persistent concerns around unresolved cost structures and what this means for margins if volumes remain subdued that investors should be aware of...

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

Kennametal's outlook anticipates $2.1 billion in revenue and $120.7 million in earnings by 2028. This scenario is based on a 2.3% annual revenue growth rate and a $27.6 million increase in earnings from the current $93.1 million.

Uncover how Kennametal's forecasts yield a $21.06 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members estimate fair value for Kennametal shares between US$21.06 and US$26.81, with two individual perspectives contributing unique forecasts. While many see potential upside, ongoing volume weakness and cost challenges continue to weigh on broader earnings expectations.

Explore 2 other fair value estimates on Kennametal - why the stock might be worth as much as 25% more 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 4 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.

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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.

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