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Kennametal (KMT) Surges 6.5%: Is This an Indication of Further Gains?

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Kennametal (KMT - Free Report) shares soared 6.5% in the last trading session to close at $23.57. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 20% loss over the past four weeks.

Kennametal’s rally is primarily led by optimism around the company’s strong momentum in its metal-cutting business unit. Strength across the company’s general engineering, aerospace and energy end markets coupled with strong innovation capabilities, solid product offerings and a wide geographical presence bode well for Kennametal.

This engineered products maker is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of -9.4%. Revenues are expected to be $524.99 million, up 1.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Kennametal, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on KMT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Kennametal is part of the Zacks Manufacturing - Tools & Related Products industry. Enerpac (EPAC - Free Report) , another stock in the same industry, closed the last trading session 1.8% higher at $19.42. EPAC has returned -5.5% in the past month.

For Enerpac, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.29. This represents a change of +3.6% from what the company reported a year ago. Enerpac currently has a Zacks Rank of #3 (Hold).

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