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Should You Add Kennametal (KMT) Stock to Your Portfolio?
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On Mar 7, we issued an updated research report on Kennametal Inc. (KMT - Free Report) .
What’s Driving the Stock?
Over the last three months, Kennametal's shares yielded a 13.28% return, outperforming the gain of 6.55% generated by the Zacks categorized Machine Tools & Related Products industry.
In second-quarter fiscal 2017, the company's adjusted earnings surpassed the Zacks Consensus Estimate by 9.1%. For fiscal 2017, Kennametal anticipates adjusted earnings to be in the range of $1.20–$1.50 per share, above $1.11 recorded in the previous year. The company is keen on developing a solid cost structure by rationalizing certain manufacturing facilities and slashing costs through employee- and cost-reduction programs.
By Dec 2018, the company anticipates its restructuring programs, including employee-reduction initiatives and others, to yield pre-tax savings of approximately $147–$162 million. Of these programs, the company projects its headcount reduction initiatives to result in estimated annualized savings of $72 million by Jun 2017. Related charges will be roughly $50 million. In addition, the other programs are likely to generate savings of $75–$90 million by Dec 2018. Related charges will be $105–$125 million.
Also, Kennametal remains keen on making strategic acquisitions and disposing non-core assets to manage its portfolio, as well as improve business activities. In fiscal 2016, the company divested certain non-core assets, comprising 18 facilities, including 11 manufacturing and seven small facilities from castings, steel-plate fabrication and deburring operations. This move will enable the company to better align its business portfolio with current market demands.
This Zacks Rank #1 (Strong Buy) company also remains committed toward rewarding its shareholders through share repurchase and dividend payments. Moreover, its diversified customer base in the industrial and infrastructure end-markets allows it to avoid customer concentration risks.
Over the last 30 days, the Zacks Consensus Estimate for the stock has been revised upward for both fiscal 2017 and 2018, reflecting positive market sentiments.
Stocks to Consider
Other favorably placed stocks within the industry are listed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) carries a Zacks Rank #2 (Buy) and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation (AVY - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Should You Add Kennametal (KMT) Stock to Your Portfolio?
On Mar 7, we issued an updated research report on Kennametal Inc. (KMT - Free Report) .
What’s Driving the Stock?
Over the last three months, Kennametal's shares yielded a 13.28% return, outperforming the gain of 6.55% generated by the Zacks categorized Machine Tools & Related Products industry.
In second-quarter fiscal 2017, the company's adjusted earnings surpassed the Zacks Consensus Estimate by 9.1%. For fiscal 2017, Kennametal anticipates adjusted earnings to be in the range of $1.20–$1.50 per share, above $1.11 recorded in the previous year. The company is keen on developing a solid cost structure by rationalizing certain manufacturing facilities and slashing costs through employee- and cost-reduction programs.
By Dec 2018, the company anticipates its restructuring programs, including employee-reduction initiatives and others, to yield pre-tax savings of approximately $147–$162 million. Of these programs, the company projects its headcount reduction initiatives to result in estimated annualized savings of $72 million by Jun 2017. Related charges will be roughly $50 million. In addition, the other programs are likely to generate savings of $75–$90 million by Dec 2018. Related charges will be $105–$125 million.
Also, Kennametal remains keen on making strategic acquisitions and disposing non-core assets to manage its portfolio, as well as improve business activities. In fiscal 2016, the company divested certain non-core assets, comprising 18 facilities, including 11 manufacturing and seven small facilities from castings, steel-plate fabrication and deburring operations. This move will enable the company to better align its business portfolio with current market demands.
This Zacks Rank #1 (Strong Buy) company also remains committed toward rewarding its shareholders through share repurchase and dividend payments. Moreover, its diversified customer base in the industrial and infrastructure end-markets allows it to avoid customer concentration risks.
Over the last 30 days, the Zacks Consensus Estimate for the stock has been revised upward for both fiscal 2017 and 2018, reflecting positive market sentiments.
Stocks to Consider
Other favorably placed stocks within the industry are listed below:
ACCO Brands Corporation (ACCO - Free Report) has a positive average earnings surprise of 24.74% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) carries a Zacks Rank #2 (Buy) and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation (AVY - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>