Carpenter Technology (CRS) opened Q2 2026 with total revenue of US$728 million, basic EPS of US$2.10 and net income excluding extra items of US$105.3 million. This put fresh numbers on a year in which trailing twelve month EPS reached US$8.67 on revenue of US$2.9 billion and net income of US$434.7 million. Over the past year, the company has seen quarterly revenue move from US$676.9 million in Q2 2025 to US$728 million in Q2 2026, while basic EPS stepped up from US$1.67 to US$2.10 and trailing net profit margin increased to 14.8% from 9.3%. These shifts may prompt investors to assess how much of that margin change appears durable.

With the latest figures on the table, the next step is to see how these earnings and margin trends line up with the prevailing narratives around Carpenter Technology's growth drivers and risks.

61.9% earnings growth on a US$2.9b base

• Trailing twelve month net income reached US$434.7 million on US$2.9b of revenue, with trailing EPS of US$8.67 after earnings grew 61.9% over the past year and revenue over the same period totaled US$2.9b.
• What stands out for a bullish view is that this 61.9% trailing earnings growth sits on top of a reported 5 year annualized earnings growth rate of 75.1%. This combination supports the idea of earnings momentum but also raises the question of how that pace lines up with more moderate forward revenue growth of about 6.5% per year.

Margins at 14.8% alongside a 35.6x P/E

• Trailing net profit margin is reported at 14.8% compared with 9.3% a year earlier, while the current P/E of 35.6x sits below the Aerospace & Defense industry average of 41.7x and slightly below the listed peer average of 36.5x.
• Bulls point to the margin level and the slightly lower 35.6x P/E as support for further upside. At the same time, a DCF fair value of US$135.54 alongside a share price of US$310.39 introduces a clear tension between price relative to peers and price relative to that DCF output, which investors may weigh differently depending on whether they focus on current profitability or on discounted cash flow metrics.

DCF fair value vs US$382.37 analyst target

• Analysts’ consensus points to a price target of US$382.37, around 23.2% above the current US$310.39 share price, while the DCF fair value cited is US$135.54, materially below both the market price and the analyst target.
• For a bullish narrative check, projected earnings growth of roughly 13.7% per year and revenue growth of about 6.5% per year are being used to support a higher analyst target of US$382.37 even though the DCF fair value sits at US$135.54. This sets up a wide gap between model based valuation and price targets that investors may treat as either an opportunity or a sign to be cautious.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Carpenter Technology's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Carpenter Technology’s 35.6x P/E, combined with a DCF fair value of US$135.54 versus a US$310.39 share price and higher analyst target, highlights valuation tension.

If that kind of pricing gap makes you cautious, use our these 869 undervalued stocks based on cash flows today to focus on companies where cash flow based models and market prices sit closer together.

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.