Kennametal (NYSE:KMT) Shares Gap Up Following Strong Earnings

Key Points

• Kennametal shares surged at the open after the company reported quarterly EPS of $2.96, beating estimates by $0.65, while revenue of $736.61 million exceeded expectations and rose 42.6% year over year.
• The company issued fiscal 2027 guidance of $4.15–$5.15 in EPS and announced a quarterly dividend of $0.20, equivalent to an annualized yield of about 2.2%.
• Despite the earnings beat, analyst sentiment remains cautious: Kennametal has an average “Reduce” rating and a $35.79 price target, while insiders sold 47,000 shares worth approximately $1.58 million over the past three months.

Kennametal Inc. (NYSE:KMT - Get Free Report) shares gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $36.06, but opened at $40.50. Kennametal shares last traded at $36.65, with a volume of 618,977 shares.

The industrial products company reported $2.96 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.31 by $0.65. Kennametal had a net margin of 6.41% and a return on equity of 11.02%. The company had revenue of $736.61 million for the quarter, compared to analysts' expectations of $725.74 million. During the same quarter in the previous year, the business posted $0.34 EPS. Kennametal's revenue was up 42.6% compared to the same quarter last year. Kennametal has set its Q1 2027 guidance at 2.500-2.800 EPS and its FY 2027 guidance at 4.150-5.150 EPS.

Kennametal Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Tuesday, August 25th. Shareholders of record on Tuesday, August 11th will be issued a $0.20 dividend. The ex-dividend date of this dividend is Tuesday, August 11th. This represents a $0.80 annualized dividend and a yield of 2.2%. Kennametal's payout ratio is 45.20%.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently commented on the stock. Barclays cut shares of Kennametal from an "equal weight" rating to an "underweight" rating and cut their price target for the company from $40.00 to $33.00 in a report on Wednesday, May 27th. Weiss Ratings cut Kennametal from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Wednesday, May 20th. JPMorgan Chase & Co. cut their target price on Kennametal from $40.00 to $34.00 and set an "underweight" rating on the stock in a research note on Monday, July 13th. DA Davidson initiated coverage on Kennametal in a report on Tuesday, June 16th. They issued a "neutral" rating and a $34.00 target price for the company. Finally, Zacks Research cut Kennametal from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, July 14th. Six research analysts have rated the stock with a Hold rating and three have assigned a Sell rating to the company's stock. According to data from MarketBeat.com, Kennametal presently has an average rating of "Reduce" and an average target price of $35.79.

Insider Transactions at Kennametal

In related news, VP Judith L. Bacchus sold 5,488 shares of the stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $35.94, for a total transaction of $197,238.72. Following the transaction, the vice president owned 4,554 shares in the company, valued at $163,670.76. This represents a 54.65% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, VP Carlonda R. Reilly sold 12,013 shares of Kennametal stock in a transaction that occurred on Tuesday, June 2nd. The stock was sold at an average price of $33.12, for a total transaction of $397,870.56. Following the completion of the sale, the vice president directly owned 25,143 shares of the company's stock, valued at approximately $832,736.16. This trade represents a 32.33% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 47,000 shares of company stock worth $1,583,326 over the last three months. 1.43% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Kennametal

A number of institutional investors and hedge funds have recently modified their holdings of the company. Rockefeller Capital Management L.P. increased its position in Kennametal by 3,600.0% during the fourth quarter. Rockefeller Capital Management L.P. now owns 999 shares of the industrial products company's stock valued at $28,000 after acquiring an additional 972 shares during the last quarter. Kohmann Bosshard Financial Services LLC purchased a new position in Kennametal in the fourth quarter worth about $28,000. Danske Bank A S bought a new stake in shares of Kennametal during the 4th quarter valued at about $31,000. Headlands Technologies LLC grew its stake in shares of Kennametal by 80.7% during the 2nd quarter. Headlands Technologies LLC now owns 1,527 shares of the industrial products company's stock valued at $35,000 after purchasing an additional 682 shares during the period. Finally, Smartleaf Asset Management LLC increased its position in shares of Kennametal by 142.3% during the 2nd quarter. Smartleaf Asset Management LLC now owns 2,091 shares of the industrial products company's stock valued at $48,000 after purchasing an additional 1,228 shares during the last quarter.

Kennametal Stock Up 2.5%

The company's 50 day moving average price is $34.39 and its two-hundred day moving average price is $36.40. The company has a current ratio of 2.38, a quick ratio of 0.99 and a debt-to-equity ratio of 0.43. The stock has a market cap of $2.82 billion, a P/E ratio of 20.88, a PEG ratio of 0.48 and a beta of 1.36.

About Kennametal

Kennametal Inc is a global industrial technology company that designs and manufactures advanced materials, tooling systems, and engineered components for a range of demanding applications. Its solutions support precision metalworking, earthmoving, and wear-resistant environments, catering to customers seeking enhanced productivity, longer tool life, and reduced operating costs.

The company's product portfolio spans indexable cutting tools, solid round tools, tool holders, metalworking fluid systems, wear parts, ceramics and composites, and custom-engineered components.

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