Zacks Investment Research Downgrades Kennametal (NYSE:KMT) to Hold

Kennametal (NYSE:KMT) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report issued on Monday, Zacks.com reports. They presently have a $29.00 price objective on the industrial products company’s stock. Zacks Investment Research‘s price target suggests a potential upside of 1.93% from the company’s current price.

According to Zacks, “Kennametal is poised to benefit from its diversified business structure, solid liquidity position and innovation capabilities. Its simplification/modernization activities are predicted to yield annualized savings of $30-$35 million in fiscal 2020 and $65-$75 million in fiscal 2021. Also, its policy of rewarding shareholders with dividends bodes well. However, the company is wary of the adverse impacts of the pandemic and it, therefore, suspended its financial projections for fiscal 2020. Notably, its cost-saving measures might be of help in the quarters ahead. In addition, weakness in gross and operating margins as well as forex woes might prove challenging. Year to date, the company’s shares have underperformed the industry. Also, its earnings estimates have declined for fiscal 2020 and fiscal 2021 in the past 30 days.”

Other equities analysts have also recently issued reports about the company. KeyCorp raised their price objective on Kennametal from $30.00 to $38.00 and gave the company an “overweight” rating in a research note on Thursday, June 11th. Morgan Stanley started coverage on Kennametal in a research note on Friday, June 26th. They set an “equal weight” rating and a $33.00 price objective on the stock. BMO Capital Markets raised their price objective on Kennametal from $18.00 to $29.00 in a research note on Wednesday, June 10th. Wells Fargo & Co raised their price objective on Kennametal from $30.00 to $35.00 and gave the company an “overweight” rating in a research note on Wednesday, June 3rd. Finally, Barclays restated a “buy” rating and set a $27.00 price objective on shares of Kennametal in a research note on Sunday, March 22nd. Two analysts have rated the stock with a sell rating, five have assigned a hold rating and four have given a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and an average target price of $31.78.

Shares of KMT opened at $28.45 on Monday. Kennametal has a 12-month low of $14.45 and a 12-month high of $38.73. The business’s fifty day moving average is $27.20 and its 200 day moving average is $28.14. The company has a quick ratio of 1.17, a current ratio of 2.52 and a debt-to-equity ratio of 0.48. The stock has a market cap of $2.26 billion, a P/E ratio of 36.47, a P/E/G ratio of 5.99 and a beta of 2.38.

Kennametal (NYSE:KMT) last issued its earnings results on Monday, May 4th. The industrial products company reported $0.46 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.32 by $0.14. Kennametal had a return on equity of 10.16% and a net margin of 3.10%. The company had revenue of $483.10 million for the quarter, compared to analysts’ expectations of $503.23 million. During the same period last year, the business earned $0.77 EPS. Kennametal’s quarterly revenue was down 19.1% compared to the same quarter last year. On average, analysts expect that Kennametal will post 0.91 EPS for the current year.

In related news, VP Judith L. Bacchus sold 10,000 shares of Kennametal stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $27.92, for a total value of $279,200.00. Following the completion of the sale, the vice president now owns 38,157 shares of the company’s stock, valued at approximately $1,065,343.44. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, VP Michelle R. Keating sold 9,000 shares of Kennametal stock in a transaction dated Wednesday, May 6th. The stock was sold at an average price of $24.24, for a total value of $218,160.00. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 26,750 shares of company stock valued at $730,280. Insiders own 1.48% of the company’s stock.

A number of institutional investors and hedge funds have recently made changes to their positions in KMT. Wellington Management Group LLP increased its holdings in Kennametal by 36.8% in the 1st quarter. Wellington Management Group LLP now owns 8,132,544 shares of the industrial products company’s stock worth $151,427,000 after acquiring an additional 2,188,320 shares during the last quarter. Thrivent Financial for Lutherans grew its holdings in Kennametal by 9,771.8% during the 4th quarter. Thrivent Financial for Lutherans now owns 2,113,559 shares of the industrial products company’s stock valued at $77,969,000 after buying an additional 2,092,149 shares in the last quarter. ArrowMark Colorado Holdings LLC grew its holdings in Kennametal by 75.1% during the 1st quarter. ArrowMark Colorado Holdings LLC now owns 2,582,130 shares of the industrial products company’s stock valued at $48,079,000 after buying an additional 1,107,252 shares in the last quarter. Norges Bank purchased a new position in Kennametal during the 4th quarter valued at about $36,365,000. Finally, Deprince Race & Zollo Inc. grew its holdings in Kennametal by 248.4% during the 1st quarter. Deprince Race & Zollo Inc. now owns 1,120,270 shares of the industrial products company’s stock valued at $20,859,000 after buying an additional 798,756 shares in the last quarter. 96.00% of the stock is owned by institutional investors.

Kennametal Company Profile

Kennametal Inc develops and applies tungsten carbides, ceramics, super-hard materials, and solutions for use in metal cutting and mission-critical wear applications to combat extreme conditions related with wear fatigue, corrosion, and high temperatures worldwide. The company operates through three segments: Industrial, Widia, and Infrastructure.

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