Why Kennametal’s latest earnings and guidance matter now

Kennametal (KMT) recently reported fourth quarter and full year results alongside new fiscal 2027 guidance, combining higher reported sales, higher net income and a maintained dividend. This gives investors several fresh data points to assess the stock.

Since the earnings release and new fiscal 2027 guidance, Kennametal’s share price has eased. The 7 day share price return is 9.89% and the 90 day share price return is 12.51%, while the year to date share price return is 6.17% and the 1 year total shareholder return is 46.76%. This suggests earlier momentum has faded and investors are reassessing how the stock’s valuation lines up with the new outlook.

If Kennametal’s latest move has you rethinking where growth could come from next, it may be worth scanning 36 power grid technology and infrastructure stocks

Kennametal’s earnings jump, fresh 2027 sales guidance and a share price that now sits between intrinsic value models and analyst targets leave one issue front and center: Where does fair value really sit after this latest move?

Most Popular Narrative: 17.2% Undervalued

Kennametal’s most followed narrative points to a fair value of $37.19 against a last close of $30.78, which is a sizeable gap for investors to weigh.

The company is actively rightsizing capacity and executing structural cost reductions (including plant closures and workforce optimization), which are projected to produce $125 million in run-rate savings by fiscal 2028, supporting significant net margin improvement as volume returns.

Want to see what turns those cost actions into a higher valuation for Kennametal? The narrative leans heavily on future revenue momentum, margin rebuild and a lower earnings multiple than many machinery peers.

Result: Fair Value of $37.19 (UNDERVALUED)

However, Kennametal’s story can change quickly if end markets like Transportation and Oil & Gas stay weak, or if expected cost savings do not materialize.

Another view on Kennametal’s valuation

The earlier fair value of $37.19 leans heavily on analyst forecasts and narrative assumptions. A different picture appears when using the SWS DCF model, which points to a value of $24.21 per share. That implies Kennametal at $30.78 screens as overvalued on this method. Which framework seems more realistic to you?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Kennametal for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of potential and concern around Kennametal leaves you uncertain, act promptly, review the data in detail, then weigh the 4 key rewards and 4 important warning signs

Looking for more Kennametal investment ideas?

Kennametal’s valuation story is only one piece of your portfolio. Use these curated ideas to broaden your watchlist and avoid missing opportunities elsewhere.

• Target dependable income by reviewing companies that show up in the 9 dividend fortresses and see which yields might complement Kennametal in your portfolio.
• Spot potential mispricings by scanning the 49 high quality undervalued stocks and compare how those stocks stack up against Kennametal’s current valuation.
• Build stability into your holdings by checking the 85 resilient stocks with low risk scores and see which stocks may help balance Kennametal’s risk profile.

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.