Should Ongoing Sales and EPS Declines Require Action From Kennametal (KMT) Investors?

In recent commentary, Wall Street turned bearish on Kennametal after two years of roughly 2.3% annual sales declines and softer earnings. The combination of shrinking revenue and earnings per share suggests Kennametal may need to rethink its approach or consider acquisitions to reignite growth. Next, we’ll examine how this pressure from sales and earnings declines could reshape Kennametal’s investment narrative for investors.

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What Is Kennametal’s Investment Narrative?

To own Kennametal today, you need to believe that a cyclical, industrial tools business with modest forecast growth and a steady dividend can still compound value despite recent stumbles. The key near term catalysts remain upcoming earnings on February 4 and management’s ability to back up its raised fiscal 2026 sales guidance, alongside continued buybacks and disciplined use of the new US$650 million credit facility. The recent bearish Wall Street commentary, tied to roughly 2.3% annual sales declines and falling earnings per share, sharpens the focus on whether that guidance is realistic or at risk of revision. It also brings the main risk into clearer view: that Kennametal’s low margins and low return on equity stay stuck if end markets remain soft and no convincing plan emerges to lift profitability.

However, one risk in the current setup may surprise investors who only look at the dividend.
Kennametal’s shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.Exploring Other PerspectivesKMT 1-Year Stock Price Chart

Two fair value views from the Simply Wall St Community span roughly US$30 to the high US$80s, underscoring how far apart individual expectations can be. Set against recent bearish commentary on Kennametal’s shrinking sales and earnings, this spread in community estimates invites you to weigh how much faith you place in a profit recovery when thinking about the company’s next chapter.

Explore 2 other fair value estimates on Kennametal – why the stock might be worth over 2x more than the current price!

Build Your Own Kennametal Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes – extraordinary investment returns rarely come from following the herd.

A great starting point for your Kennametal research is our analysis highlighting 3 key rewards that could impact your investment decision.Our free Kennametal research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate Kennametal’s overall financial health at a glance.Searching For A Fresh Perspective?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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