Last week, you might have seen that Kennametal Inc. (NYSE:KMT) released its full-year result to the market. The early response was not positive, with shares down 2.5% to US$33.13 in the past week. Revenues were US$2.4b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$4.42 were also better than expected, beating analyst predictions by 15%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Kennametal's seven analysts is for revenues of US$3.39b in 2027. This reflects a huge 44% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 15% to US$5.15. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.72b and earnings per share (EPS) of US$4.21 in 2027. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Despite these upgrades,the analysts have not made any major changes to their price target of US$34.71, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Kennametal analyst has a price target of US$39.00 per share, while the most pessimistic values it at US$31.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Kennametal's rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 1.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kennametal to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kennametal following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Kennametal going out to 2029, and you can see them free on our platform here..

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.