Kennametal Inc. (KMT - Free Report) failed to impress investors with its recent operational performance due to tough end-market conditions and other challenges, which are likely to adversely impact its earnings.
The currently Zacks Rank #4 (Sell) player has a market capitalization of $2.2 billion. Due to the above-mentioned woes, the stock has lost 19.3% compared with the industry’s decline of 25.4% in the past six months.
Let’s discuss the factors that might continue to take a toll on the firm.
Weak End-Market Condition: Kennametal is experiencing persistent softness in the transportation end market due to supply-chain constraints, mainly related to chip availability. This might be concerning for its performance in the quarters ahead.
High Costs and Expenses: KMT has been dealing with the adverse impacts of increasing the cost of sales and operating expenses. In fiscal fourth-quarter 2022 (ended Jun 2022), its cost of sales increased 5.9% year over year to $360.4 million. Also, Kennametal’s operating income suffered a $22-million negative impact from high raw material costs. Inflation in costs is likely to keep affecting its margins and profitability in the near term.
Forex Woes: Given its widespread presence in the international markets, Kennametal is exposed to unfavorable foreign currency movements. For instance, in fourth-quarter 2022, foreign exchange headwinds had an adverse impact of 4% on KMT’s revenues. A stronger U.S. dollar might depress its overseas business results in the quarters ahead.
Southbound Estimate Revision: In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 (ending June 2023) earnings has been revised 9% downward.
Zacks Rank & Stocks to Consider
Some better-ranked companies from the industrial products sector are discussed below:
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
GEF’s earnings estimates have increased 0.4% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 19.3% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 31.5% in the past six months.
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Kennametal Inc. (KMT - Free Report) failed to impress investors with its recent operational performance due to tough end-market conditions and other challenges, which are likely to adversely impact its earnings.
The currently Zacks Rank #4 (Sell) player has a market capitalization of $2.2 billion. Due to the above-mentioned woes, the stock has lost 19.3% compared with the industry’s decline of 25.4% in the past six months.
Let’s discuss the factors that might continue to take a toll on the firm.
Weak End-Market Condition: Kennametal is experiencing persistent softness in the transportation end market due to supply-chain constraints, mainly related to chip availability. This might be concerning for its performance in the quarters ahead.
High Costs and Expenses: KMT has been dealing with the adverse impacts of increasing the cost of sales and operating expenses. In fiscal fourth-quarter 2022 (ended Jun 2022), its cost of sales increased 5.9% year over year to $360.4 million. Also, Kennametal’s operating income suffered a $22-million negative impact from high raw material costs. Inflation in costs is likely to keep affecting its margins and profitability in the near term.
Forex Woes: Given its widespread presence in the international markets, Kennametal is exposed to unfavorable foreign currency movements. For instance, in fourth-quarter 2022, foreign exchange headwinds had an adverse impact of 4% on KMT’s revenues. A stronger U.S. dollar might depress its overseas business results in the quarters ahead.
Southbound Estimate Revision: In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 (ending June 2023) earnings has been revised 9% downward.
Zacks Rank & Stocks to Consider
Some better-ranked companies from the industrial products sector are discussed below:
Greif, Inc. (GEF - Free Report) presently sports a Zacks Rank #1 (Strong Buy). GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
GEF’s earnings estimates have increased 0.4% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 19.3% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.
In the past 60 days, Valmont’s earnings estimates have increased 3.8% for 2022. The stock has rallied 31.5% in the past six months.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Get the latest research report on VMI - FREE
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