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Is CRS Set to Gain From Growth in Its Specialty Alloys Operations?
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Key Takeaways
Carpenter Technology's Specialty Alloys Operations margin reached a record 37.8% in FY26.
Aerospace and Defense sales rose 15%, while Industrial and Consumer sales gained 4.7% in FY26.
CRS targets 850-880M in FY27 operating income, up 21-25% from FY26.
Carpenter Technology Corporation’s (CRS - Free Report) Specialty Alloys Operations segment delivered a record adjusted operating margin of 37.8% in the fourth quarter of 2026, up from year-ago’s 30.5%. This marked the segment’s eighteenth consecutive quarter of margin expansion. The record operating performance in the fourth quarter of 2026 was driven by continued productivity gains, pricing realization and improved product mix. This led to an operating margin of 27.7% in fiscal 2026.
The Specialty Alloys Operations segment comprises Carpenter Technology’s major premium alloy and stainless-steel manufacturing operations. The segment generated $2.83 billion in sales in fiscal 2026, representing 90.5% of Carpenter Technology’s sales in the year. The segment sold 200,872 thousand pounds in fiscal 2026 compared with 186,270 thousand pounds a year ago.
The segment’s sales are also gaining from Aerospace and Defense, and Industrial and Consumer end-use markets. Aerospace and Defense sales increased 15% year over year in fiscal 2026, while Industrial and Consumer markets sales rose 4.7%.
Backed by record profitability and favorable demand trends, CRS expects fiscal 2027 operating income of $850-$880 million, indicating growth of 21-25% from that reported in fiscal 2026. 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. With its solid streak of margin expansion and robust demand in key end markets, the Specialty Alloys Operations segment is likely to remain a solid growth driver for Carpenter Technology in the upcoming years.
Performances of Other Steel Stocks
Commercial Metals Company (CMC - Free Report) has been benefiting from steady North American construction activity and firm pricing discipline. Backed by its focus on transformation, Commercial Metals is expected to generate structurally higher margins and enhanced free cash flow.
Commercial Metals expects its new precast platforms to generate $165-$175 million in EBITDA in fiscal 2026, with incremental annualized EBITDA of $240-$250 million and $30-$40 million in annualized synergies by the end of year three.
Nucor Corporation (NUE - Free Report) is committed to expanding its production capabilities and growing its business through acquisitions. Nucor is seeing strong demand in the energy markets. While the automotive market remains impacted by high interest rates and tariffs, the accelerating adoption of electric vehicles bodes well for this market.
Demand in non-residential construction markets was healthy in 2025 and the momentum is expected to continue this year, driving Nucor’s earnings and cash flows.
CRS’s Price Performance, Valuations & Estimates
Carpenter Technology’s shares have jumped 57% over the past year compared with the industry’s growth of 49.9%. In comparison, the Zacks Basic Materials sector and the S&P 500 have returned 13.8% and 17.9%, respectively.
Image Source: Zacks Investment Research
Carpenter Technology is currently trading at a forward price/sales ratio of 5.64 compared with the industry's 2.42.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $3.40 billion, indicating an 8.8% year-over-year jump. The consensus mark for the year’s earnings is pegged at $13.28 per share, indicating a rise of 23.4%.
The Zacks Consensus Estimate for fiscal 2027 sales implies 8.4% year-over-year growth, and the same for earnings suggests a rally of 17.9%.
EPS estimates for fiscal 2026 and 2027 have moved north over the past 60 days.
View the Zacks #1 Rank List
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Is CRS Set to Gain From Growth in Its Specialty Alloys Operations?
Key Takeaways
Carpenter Technology Corporation’s (CRS - Free Report) Specialty Alloys Operations segment delivered a record adjusted operating margin of 37.8% in the fourth quarter of 2026, up from year-ago’s 30.5%. This marked the segment’s eighteenth consecutive quarter of margin expansion. The record operating performance in the fourth quarter of 2026 was driven by continued productivity gains, pricing realization and improved product mix. This led to an operating margin of 27.7% in fiscal 2026.
The Specialty Alloys Operations segment comprises Carpenter Technology’s major premium alloy and stainless-steel manufacturing operations. The segment generated $2.83 billion in sales in fiscal 2026, representing 90.5% of Carpenter Technology’s sales in the year. The segment sold 200,872 thousand pounds in fiscal 2026 compared with 186,270 thousand pounds a year ago.
The segment’s sales are also gaining from Aerospace and Defense, and Industrial and Consumer end-use markets. Aerospace and Defense sales increased 15% year over year in fiscal 2026, while Industrial and Consumer markets sales rose 4.7%.
Backed by record profitability and favorable demand trends, CRS expects fiscal 2027 operating income of $850-$880 million, indicating growth of 21-25% from that reported in fiscal 2026. 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. With its solid streak of margin expansion and robust demand in key end markets, the Specialty Alloys Operations segment is likely to remain a solid growth driver for Carpenter Technology in the upcoming years.
Performances of Other Steel Stocks
Commercial Metals Company (CMC - Free Report) has been benefiting from steady North American construction activity and firm pricing discipline. Backed by its focus on transformation, Commercial Metals is expected to generate structurally higher margins and enhanced free cash flow.
Commercial Metals expects its new precast platforms to generate $165-$175 million in EBITDA in fiscal 2026, with incremental annualized EBITDA of $240-$250 million and $30-$40 million in annualized synergies by the end of year three.
Nucor Corporation (NUE - Free Report) is committed to expanding its production capabilities and growing its business through acquisitions. Nucor is seeing strong demand in the energy markets. While the automotive market remains impacted by high interest rates and tariffs, the accelerating adoption of electric vehicles bodes well for this market.
Demand in non-residential construction markets was healthy in 2025 and the momentum is expected to continue this year, driving Nucor’s earnings and cash flows.
CRS’s Price Performance, Valuations & Estimates
Carpenter Technology’s shares have jumped 57% over the past year compared with the industry’s growth of 49.9%. In comparison, the Zacks Basic Materials sector and the S&P 500 have returned 13.8% and 17.9%, respectively.
Carpenter Technology is currently trading at a forward price/sales ratio of 5.64 compared with the industry's 2.42.
The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $3.40 billion, indicating an 8.8% year-over-year jump. The consensus mark for the year’s earnings is pegged at $13.28 per share, indicating a rise of 23.4%.
The Zacks Consensus Estimate for fiscal 2027 sales implies 8.4% year-over-year growth, and the same for earnings suggests a rally of 17.9%.
EPS estimates for fiscal 2026 and 2027 have moved north over the past 60 days.
CRS currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.