Kennametal (NYSE:KMT) Shares Gap Down After Earnings Miss

Key Points

• Kennametal's share price experienced a significant drop, opening at $20.84 after closing at $25.13 due to weaker than expected earnings, with earnings per share (EPS) at $0.34, missing estimates by $0.06.
• The company has declared a quarterly dividend of $0.20 per share, which will be paid on August 26th, translating to an annualized dividend yield of 4.3%.
• Analysts have mixed ratings on Kennametal, with a recent upgrade from Wall Street Zen to a "buy" rating, while the average target price stands at $25.40 from various analysts.

Kennametal Inc. (NYSE:KMT - Get Free Report) shares gapped down before the market opened on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $25.13, but opened at $20.84. Kennametal shares last traded at $18.68, with a volume of 580,088 shares changing hands.

The industrial products company reported $0.34 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.40 by ($0.06). Kennametal had a return on equity of 8.09% and a net margin of 4.73%. The company had revenue of $516.45 million for the quarter, compared to the consensus estimate of $527.52 million. During the same period last year, the firm posted $0.49 EPS. The company's revenue was down 4.9% compared to the same quarter last year.

Kennametal Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, August 26th. Shareholders of record on Tuesday, August 12th will be issued a $0.20 dividend. This represents a $0.80 annualized dividend and a yield of 4.0%. The ex-dividend date of this dividend is Tuesday, August 12th. Kennametal's payout ratio is 57.55%.

Analyst Ratings Changes

KMT has been the topic of several analyst reports. Morgan Stanley boosted their price target on shares of Kennametal from $20.00 to $21.00 and gave the company an "equal weight" rating in a report on Monday, May 12th. JPMorgan Chase & Co. reduced their target price on shares of Kennametal from $23.00 to $20.00 and set an "underweight" rating on the stock in a research note on Thursday. Barclays boosted their target price on shares of Kennametal from $22.00 to $24.00 and gave the company an "equal weight" rating in a research note on Monday, May 12th. Loop Capital restated a "hold" rating and issued a $24.00 target price (up previously from $21.00) on shares of Kennametal in a research note on Wednesday, June 25th. Finally, Wall Street Zen upgraded shares of Kennametal from a "hold" rating to a "buy" rating in a research note on Friday, May 16th. Two research analysts have rated the stock with a sell rating, four have given a hold rating and one has issued a buy rating to the company. Based on data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus target price of $24.50.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Mackenzie Financial Corp lifted its position in Kennametal by 557.1% during the 1st quarter. Mackenzie Financial Corp now owns 77,877 shares of the industrial products company's stock valued at $1,659,000 after purchasing an additional 66,025 shares during the period. Janney Montgomery Scott LLC lifted its position in Kennametal by 17.8% during the 1st quarter. Janney Montgomery Scott LLC now owns 13,242 shares of the industrial products company's stock valued at $282,000 after purchasing an additional 2,000 shares during the period. GAMMA Investing LLC lifted its position in Kennametal by 699.1% during the 1st quarter. GAMMA Investing LLC now owns 11,651 shares of the industrial products company's stock valued at $248,000 after purchasing an additional 10,193 shares during the period. Invesco Ltd. lifted its position in Kennametal by 4.1% during the 4th quarter. Invesco Ltd. now owns 426,083 shares of the industrial products company's stock valued at $10,235,000 after purchasing an additional 16,926 shares during the period. Finally, Envestnet Asset Management Inc. lifted its position in Kennametal by 219.5% during the 1st quarter. Envestnet Asset Management Inc. now owns 57,481 shares of the industrial products company's stock valued at $1,224,000 after purchasing an additional 39,492 shares during the period.

Kennametal Trading Up 1.3%

The company has a debt-to-equity ratio of 0.45, a quick ratio of 1.10 and a current ratio of 2.46. The company has a market capitalization of $1.54 billion, a price-to-earnings ratio of 16.85, a P/E/G ratio of 2.73 and a beta of 1.44. The business's 50-day simple moving average is $23.34 and its 200-day simple moving average is $21.96.

About Kennametal

Kennametal Inc engages in development and application of tungsten carbides, ceramics, and super-hard materials and solutions for use in metal cutting and extreme wear applications to enable customers work against corrosion and high temperatures conditions worldwide. The company operates through two segments, Metal Cutting and Infrastructure.