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KMT · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is Kennametal Inc. (KMT) stock moving?
Kennametal reported fiscal Q1 2027 results on Nov 4 with adjusted EPS of $3.48, well above the $2.65 estimate, and raised FY27 adjusted EPS guidance to $5.00-$6.00 from $4.15-$5.15, above the $4.96 consensus. Sales were slightly short at $768.2M versus $770.8M, and FY27 sales guidance was affirmed at $3.33B-$3.45B. The main concern was Q2 sales guidance of $785M-$815M, well below the $837.9M consensus, and Q2 EPS guidance of $1.20-$1.50 was slightly below the $1.36 estimate. Operating margin of 49.4% was inflated by about $323M of favorable raw-material pricing timing, so it overstates the underlying run-rate. Management sees a 16%-19% adjusted EBITDA margin beyond FY27, but only if tungsten stays at current levels, and expects free operating cash flow of about 20% of adjusted net income with capex near $85M. The stock fell about 14% on Nov 4 on volume of 4.5M, roughly four times the recent norm, and dropped to a low of $22.80 on Nov 6. It has since rebounded to about $24.03 on Nov 10, still roughly 21% below the Nov 3 close of $30.26. JPMorgan kept an Underweight rating and cut its target to $27, which is above the current price but signals limited upside. Metal Cutting sales grew 28%, and a $0.20 quarterly dividend was declared. Volume has eased from the post-earnings peak, which suggests the selloff is stabilizing, but the sales miss and the timing-driven margin cut against a firm recovery view.
News behind the analysis
- Kennametal Inc. Reports Metal Cutting Sales Growth and Analyst Rating UpdateMetal Cutting sales rose 28% while JPMorgan kept an Underweight rating and lowered its price target.
- Kennametal Declares Quarterly DividendKennametal declared a quarterly dividend of $0.20 per share.
- JP Morgan Maintains Underweight on Kennametal, Lowers Price Target to $27JPMorgan kept its Underweight rating on Kennametal and cut its price target to $27 after the quarterly results.
- Kennametal Announces Fiscal 2027 First Quarter ResultsSales rose 54% and first-quarter diluted EPS was a record $3.48.
- Kennametal Q1 Adj. EPS $3.48 Beats $2.65 Estimate, Sales $768.190M Miss $770.804M EstimateAdjusted EPS beat consensus by about 31%, while sales came in slightly below estimates.
- Kennametal Sees Q2 Adj EPS $1.20-$1.50 vs $1.36 Est; Sees Sales $785.000M-$815.000M vs $837.860M EstQ2 sales guidance of $785M-$815M sits well below the $837.9M consensus, while EPS guidance is roughly in line.
- Kennametal Raises FY2027 Adj EPS Guidance from $4.15-$5.15 to $5.00-$6.00 vs $4.96 Est; Affirms FY2027 Sales Guidance of $3.330B-$3.450B vs $3.379B EstFull-year adjusted EPS guidance was raised to $5.00-$6.00, while full-year sales guidance was affirmed at $3.33B-$3.45B.
- Kennametal Q1 Operating Margin 49.4% vs 7.5% YoY, Driven By About $323M Of Favourable Raw-Material Pricing TimingThe jump in operating margin was driven mainly by about $323M of favorable raw-material pricing timing rather than underlying operations.
- Kennametal Sees 16%-19% Adj. EBITDA Margin Beyond FY27, Assuming Tungsten Stays At Current LevelsThe company sees a 16%-19% adjusted EBITDA margin beyond FY27, contingent on tungsten prices staying at current levels.
- Kennametal Q1 2027 Earnings Call TranscriptFull transcript of the fiscal first-quarter 2027 earnings call, where management discussed results and outlook.
About Kennametal Inc.
Kennametal is a Pittsburgh-based maker of tungsten carbide cutting tools, tool holders and wear-resistant parts used by manufacturers, aerospace, energy, mining and construction customers. It is one of the most tungsten-heavy industrial companies, so its results have recently been shaped by record tungsten prices: fiscal 2026 sales (year ended June 2026) were about $2.4 billion, and profits rose sharply as the company raised its prices.
How it makes money
It has two segments. Metal Cutting, roughly 60% of sales, sells indexable inserts, solid carbide drills and end mills, and tooling systems to machine shops, auto and general engineering makers, and aerospace firms. Infrastructure, roughly 40%, sells tungsten carbide powders, wear parts, earthworks tools for mining and road building, and parts for oil and gas. Most sales go through distributors, and a large share comes from outside the US. Fiscal 2026 sales were about $2.36 billion, up about 20%. The September 2026 quarter was up about 54%, mostly because prices tied to raw materials rose faster than costs. Management says this boost should fade, and it expects adjusted EBITDA margins of about 16–19% after fiscal 2027.
What usually moves KMT
- Tungsten and other raw material prices compared with the prices it charges
- Global factory activity and industrial production (PMIs)
- Aerospace & defense and energy end-market demand
- Mining and construction (earthworks) activity
- Currency moves, given large overseas sales