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Kennametal (KMT) Surges 20.4% YTD: Will the Momentum Continue?

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Shares of Kennametal Inc. (KMT - Free Report) have gained 20.4% in the year-to-date period, compared with the industry’s 16% increase. Solid product offerings and commercial and operational excellence are supporting the company’s top line.

What’s Aiding KMT?

Strength in the general engineering, transportation, aerospace and energy end markets is benefiting the Metal Cutting segment. Also, its strategic initiatives, innovation and operational excellence bode well. The Infrastructure segment’s revenues are supported by strength in energy, earthworks and general engineering end markets and focus on improving customer service levels.

Mega-trends like hybrid and electric vehicles, digitalization and ESG align well with Kennametal’s technical expertise and market exposure. The company aims to drive profitability through operational excellence by enhancing manufacturing and business process productivity and optimizing investments in commercial excellence and technology to target the highest return growth initiatives.

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KMT’s bullish fiscal full-year outlook holds promises. For fiscal 2023 (ending June 2023), it expects sales of $2.07-$2.10 billion compared with $2.05- $2.10 billion predicted earlier. Adjusted earnings per share are anticipated to be $1.50-$1.70 compared with the prior guidance of $1.30-$1.70.

Kennametal’s commitment to rewarding shareholders through dividend payments and share buybacks also drove its shares. In the third quarter of fiscal 2023 (ended Mar 31, 2023), KMT’s dividend payments totaled $48.5 million and it repurchased shares worth $37.6 million.

Will the Trend Last?

Accretive pricing actions are expected to aid Kennametal’s bottom line. In the quarters ahead, the company is likely to gain from its innovation capabilities. Despite uncertainties and challenges in the global economy, Kennametal expects end markets to remain resilient for the rest of fiscal 2023.

Zacks Rank & Other Stocks to Consider

KMT currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:

Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks.

IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 7.5%. The stock has improved 20% in the year-to-date period.

Alamo Group Inc. (ALG - Free Report) currently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.

In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 29.7% in the year-to-date period.

Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1, at present. The company has a trailing four-quarter earnings surprise of 44.4%, on average.

In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 19.3% in the year-to-date period.

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