Kennametal beats Q1 sales estimates, raises forecast

Overview

• Kennametal fiscal Q1 sales grow 3%, beating analyst expectations

• Adjusted EPS for fiscal Q1 beats consensus, rising 18% to $0.34

• Company raises annual sales and adjusted EPS outlook

Outlook

• Company expects Q2 sales of $500 mln to $520 mln, with a 2% FX tailwind

• Kennametal projects FY sales of $2.100 bln to $2.170 bln

• Company anticipates FY adjusted EPS of $1.35 to $1.65

Result Drivers

• SALES GROWTH - Sales increased 3% due to organic growth and favorable currency exchange effects, despite divestiture impact

• OPERATING INCOME DRIVERS - Increase in operating income driven by pricing, tariff surcharges, and restructuring savings, offset by higher costs and inflation

• SEGMENT PERFORMANCE - Metal Cutting sales rose 5% due to organic growth and currency effects; Infrastructure sales up 1% with similar growth factors, offset by divestitures

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 6 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

• Wall Street's median 12-month price target for Kennametal Inc is $21.50, about 2.8% below its November 4 closing price of $22.11

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 17 three months ago

Press Release: ID:nPn9YWg1Ma

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