Kennametal (KMT) Downgraded by Zacks Investment Research to Hold

Zacks Investment Research downgraded shares of Kennametal (NYSE:KMT) from a buy rating to a hold rating in a research note published on Wednesday.

According to Zacks, “Month to date, Kennametal's shares have outperformed the industry. In third-quarter fiscal 2018, the company's top line surpassed the Zacks Consensus Estimate by 1.5% while increased 15% year over year. Also, the company's bottom line increased 16.7% year over year. For fiscal 2018, the company raised its adjusted earnings-per-share guidance to $2.55-$2.65, with the mid-point increasing from $2.55 to $2.60. Organic sales growth is predicted to be at the top end of the prior projection of 9-11%. In the quarters ahead, we believe that the company will gain from its diversified customer base, international operations, favorable pricing and three initiatives, including growth, modernization and simplification. However, the company is exposed to risks from foreign currency translation, stiff competition and high debt levels. Costs of raw materials are predicted to inflate in the fourth quarter.”

Other equities research analysts also recently issued research reports about the company. ValuEngine upgraded Kennametal from a hold rating to a buy rating in a research report on Friday, February 2nd. Jefferies Group reaffirmed a buy rating and set a $60.00 price objective on shares of Kennametal in a research note on Thursday, January 18th. Barrington Research reaffirmed a buy rating and set a $53.00 price objective on shares of Kennametal in a research note on Tuesday, May 1st. Barclays assumed coverage on Kennametal in a research note on Thursday, February 15th. They issued an equal weight rating and a $47.00 target price on the stock. Finally, BMO Capital Markets reissued a hold rating and issued a $46.00 target price on shares of Kennametal in a research note on Wednesday, April 18th. One equities research analyst has rated the stock with a sell rating, eight have given a hold rating and four have issued a buy rating to the company. The company has a consensus rating of Hold and an average target price of $49.18.

NYSE KMT traded up $0.15 on Wednesday, hitting $39.24. 884 shares of the stock traded hands, compared to its average volume of 1,086,101. Kennametal has a 12 month low of $39.10 and a 12 month high of $39.47. The firm has a market cap of $3.18 billion, a price-to-earnings ratio of 25.72, a price-to-earnings-growth ratio of 3.00 and a beta of 2.05. The company has a current ratio of 2.60, a quick ratio of 1.47 and a debt-to-equity ratio of 0.57.

Kennametal (NYSE:KMT) last announced its quarterly earnings data on Wednesday, May 2nd. The industrial products company reported $0.70 earnings per share for the quarter, missing the consensus estimate of $0.72 by ($0.02). Kennametal had a net margin of 6.83% and a return on equity of 17.01%. The firm had revenue of $607.94 million for the quarter, compared to the consensus estimate of $601.10 million. During the same period last year, the company posted $0.60 earnings per share. Kennametal’s revenue for the quarter was up 15.0% on a year-over-year basis. analysts forecast that Kennametal will post 2.6 EPS for the current year.

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, May 30th. Investors of record on Tuesday, May 15th will be given a $0.20 dividend. This represents a $0.80 dividend on an annualized basis and a yield of 2.04%. The ex-dividend date of this dividend is Monday, May 14th. Kennametal’s dividend payout ratio (DPR) is currently 52.63%.

A number of hedge funds have recently modified their holdings of KMT. Victory Capital Management Inc. grew its stake in Kennametal by 109.9% in the 1st quarter. Victory Capital Management Inc. now owns 2,121,043 shares of the industrial products company’s stock worth $85,182,000 after acquiring an additional 1,110,683 shares in the last quarter. Bank of New York Mellon Corp raised its holdings in shares of Kennametal by 39.5% in the fourth quarter. Bank of New York Mellon Corp now owns 1,719,336 shares of the industrial products company’s stock worth $83,234,000 after buying an additional 487,255 shares during the last quarter. Impala Asset Management LLC purchased a new position in shares of Kennametal in the fourth quarter worth $16,537,000. BlackRock Inc. raised its holdings in shares of Kennametal by 3.9% in the first quarter. BlackRock Inc. now owns 8,853,653 shares of the industrial products company’s stock worth $355,564,000 after buying an additional 328,921 shares during the last quarter. Finally, UBS Asset Management Americas Inc. raised its holdings in shares of Kennametal by 531.8% during the fourth quarter. UBS Asset Management Americas Inc. now owns 354,938 shares of the industrial products company’s stock worth $17,183,000 after purchasing an additional 298,762 shares during the last quarter. Institutional investors and hedge funds own 98.61% of the company’s stock.

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. It operates through three segments: Industrial, Widia, and Infrastructure.

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