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Will CRS's Brownfield Expansion Project Aid Growth Through 2029?
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Key Takeaways
Carpenter Technology's $400M Athens project is on schedule and within budget for FY28.
The expansion will add 9,000 tons of high-purity melt capacity, a 7% rise from FY19 shipments.
CRS targets $1.2-$1.3B in FY29 operating income, up from $702M in FY26.
Carpenter Technology’s (CRS - Free Report) brownfield expansion finished fiscal 2026 on schedule and within budget. The project is slated for completion by the start of fiscal 2028, accelerating CRS’s earnings growth profile.
The company is investing in a $400-million brownfield expansion project based in Athens. The project is aimed at adding high-purity primary and secondary melt capacity to the company’s existing downstream finishing assets, which will boost long-term growth.
The company is aiming to expand its capacity with a vacuum induction melting furnace, a crucial piece of equipment to manufacture high-purity specialty alloys. The brownfield capacity expansion project is designed to add 9,000 additional tons, marking a 7% rise from Carpenter Technology’s 2019 shipments.
The construction phase of the project is well underway with major equipment being delivered and installed. The company is focused on completing construction and preparing for a smooth startup of operations.
Carpenter Technology expects cash generation to further increase beyond fiscal 2027, driven by earnings expansion and profitability contributions from the brownfield project. CRS set a fiscal 2029 operating income target of $1.2-$1.3 billion, suggesting a solid jump from the $702 million reported in fiscal 2026. The upside will be fueled by both a robust underlying demand environment and the added capacity from the brownfield expansion. The company projects growth beyond fiscal 2026 as the brownfield project will still ramp up production amid a growing underlying demand environment.
Growth Strategies by Other Steel Stocks
Commercial Metals Company’s (CMC - Free Report) Transform, Advance, Grow Program focuses on driving higher through-the-cycle margins, earnings, cash flows and ROIC. Commercial Metals expects an annualized EBITDA benefit of $150 million in fiscal 2026 from the program.
Launched in 2024, the TAG program aims to drive consistency across all areas of the business for Commercial Metals. The program is designed to optimize logistics, reduce input consumption, lower costs and boost energy efficiency.
Cleveland-Cliffs Inc. (CLF - Free Report) is investing $1 billion to modernize its Middletown Works facility in Ohio, supported by a $500-million award from the U.S. Department of Energy (“DOE”). Cleveland-Cliffs and the DOE will each fund $500 million of the project. The investment is expected to be deployed over the next four years while maintaining uninterrupted steel production at the facility. The project represents a rescoping of Cleveland-Cliffs’ previously planned decarbonization initiative at Middletown Works.
CRS’s Price Performance, Valuations & Estimates
Carpenter Technology’s shares have surged 97.5% over the past year compared with the industry’s growth of 83.8%. In comparison, the Zacks Basic Materials sector and the S&P 500 have returned 37.1% and 22.4%, respectively.
Image Source: Zacks Investment Research
CRS is currently trading at a forward price/sales ratio of 6.87 compared with the industry's 2.69.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $3.04 billion, indicating an 8.8% year-over-year jump. The consensus mark for the year’s earnings is pegged at $13.08 per share, indicating a year-over-year rise of 21%.
The Zacks Consensus Estimate for fiscal 2028 sales implies 8.4% year-over-year growth, and the same for earnings suggests a rise of 19.4%.
EPS estimates for fiscal 2027 and 2028 have moved north over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Will CRS's Brownfield Expansion Project Aid Growth Through 2029?
Key Takeaways
Carpenter Technology’s (CRS - Free Report) brownfield expansion finished fiscal 2026 on schedule and within budget. The project is slated for completion by the start of fiscal 2028, accelerating CRS’s earnings growth profile.
The company is investing in a $400-million brownfield expansion project based in Athens. The project is aimed at adding high-purity primary and secondary melt capacity to the company’s existing downstream finishing assets, which will boost long-term growth.
The company is aiming to expand its capacity with a vacuum induction melting furnace, a crucial piece of equipment to manufacture high-purity specialty alloys. The brownfield capacity expansion project is designed to add 9,000 additional tons, marking a 7% rise from Carpenter Technology’s 2019 shipments.
The construction phase of the project is well underway with major equipment being delivered and installed. The company is focused on completing construction and preparing for a smooth startup of operations.
Carpenter Technology expects cash generation to further increase beyond fiscal 2027, driven by earnings expansion and profitability contributions from the brownfield project. CRS set a fiscal 2029 operating income target of $1.2-$1.3 billion, suggesting a solid jump from the $702 million reported in fiscal 2026. The upside will be fueled by both a robust underlying demand environment and the added capacity from the brownfield expansion. The company projects growth beyond fiscal 2026 as the brownfield project will still ramp up production amid a growing underlying demand environment.
Growth Strategies by Other Steel Stocks
Commercial Metals Company’s (CMC - Free Report) Transform, Advance, Grow Program focuses on driving higher through-the-cycle margins, earnings, cash flows and ROIC. Commercial Metals expects an annualized EBITDA benefit of $150 million in fiscal 2026 from the program.
Launched in 2024, the TAG program aims to drive consistency across all areas of the business for Commercial Metals. The program is designed to optimize logistics, reduce input consumption, lower costs and boost energy efficiency.
Cleveland-Cliffs Inc. (CLF - Free Report) is investing $1 billion to modernize its Middletown Works facility in Ohio, supported by a $500-million award from the U.S. Department of Energy (“DOE”). Cleveland-Cliffs and the DOE will each fund $500 million of the project. The investment is expected to be deployed over the next four years while maintaining uninterrupted steel production at the facility. The project represents a rescoping of Cleveland-Cliffs’ previously planned decarbonization initiative at Middletown Works.
CRS’s Price Performance, Valuations & Estimates
Carpenter Technology’s shares have surged 97.5% over the past year compared with the industry’s growth of 83.8%. In comparison, the Zacks Basic Materials sector and the S&P 500 have returned 37.1% and 22.4%, respectively.
CRS is currently trading at a forward price/sales ratio of 6.87 compared with the industry's 2.69.
The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $3.04 billion, indicating an 8.8% year-over-year jump. The consensus mark for the year’s earnings is pegged at $13.08 per share, indicating a year-over-year rise of 21%.
The Zacks Consensus Estimate for fiscal 2028 sales implies 8.4% year-over-year growth, and the same for earnings suggests a rise of 19.4%.
EPS estimates for fiscal 2027 and 2028 have moved north over the past 60 days.
CRS currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.