We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Carpenter Technology Sustain Its Record Operating Income?
Read MoreHide Full Article
Key Takeaways
Carpenter Technology achieved record adjusted operating income of $196M in Q1'27.
FY27 operating income is projected at $850-$880M, up 21-25% from FY26.
Carpenter Technology targets $1.2-$1.3B in FY29, driven by higher volumes and capacity expansion.
Carpenter Technology Corporation (CRS - Free Report) achieved a record adjusted operating income of $196 million in the first quarter of fiscal 2027, marking its most profitable first quarter on record. The upside was driven by strong demand in the aerospace and defense end-markets, as well as ongoing improvements in the product mix.
Carpenter Technology has been demonstrating its recovery growth trajectory through fiscal 2023, with increased productivity across the company’s facilities. The company has continued to advance its earnings growth through higher productivity, improved product mix and disciplined pricing across operations. The company completed fiscal 2026 with adjusted operating income of $702 million, up 34% from fiscal 2025 and marking its most profitable year.
With record operating performance and strengthening demand signals, the company maintained its fiscal 2027 operating income outlook of $850-$880 million, suggesting growth of 21-25% from that reported in fiscal 2026.
The company expects expansion beyond fiscal 2027, supported by strengthening market dynamics and additional capacity. It reaffirmed its fiscal 2029 operating income target of $1.2-$1.3 billion, supported by higher volumes, productivity improvements, product-mix optimization, pricing realization and contributions from its brownfield expansion.
An upbeat outlook and a consistent performance have set an optimistic tone for the upcoming quarters.
Operating Performance & Outlook of Other Steel Stocks
ATI Inc. (ATI - Free Report) is seeing consistent momentum in the non-residential construction market. Demand in non-residential construction markets was healthy in 2025 and the momentum is expected to continue this year, driving its earnings and cash flows. Strong aerospace and defense demand, favorable pricing and higher commercial jet engine sales supported 26.5% growth in revenues in the third quarter.
For 2026, ATI raised its adjusted EBITDA guidance to $1.19-$1.2 billion from the previous $1.135-$1.185 billion. The midpoint increased by $35 million, following a $125-million upward revision in the preceding quarter. ATI attributed the stronger outlook to sustained demand supported by long-term agreements, differentiated manufacturing capabilities and disciplined operational execution. ATI expects these factors to support growth in 2027.
Commercial Metals Company (CMC - Free Report) is gaining from healthy demand across Commercial Metals’ major North American product lines. Commercial Metals is also using price increases across mill products to address higher scrap costs.
Backed by its focus on transformation, the company expects to generate structurally higher margins and enhanced free cash flow. Commercial Metals anticipates fiscal 2029 core EBITDA to be $1.65-$1.80 billion, suggesting a surge of 106% at mid-point from $837 million delivered in 2025. The core EBITDA margin is expected to be 15-16%. The company expects to generate a free cash flow of $1.38-$1.53 billion in fiscal 2029.
CRS’s Price Performance, Valuations & Estimates
Carpenter Technology’s shares have slipped 7.7% over the past year compared with the industry’s fall of 3%. In comparison, the Zacks Basic Materials sector and the S&P 500 have returned 12.7% and 9.4%, respectively.
Image Source: Zacks Investment Research
Carpenter Technology is trading at a forward price/sales ratio of 4.20X compared with the industry's 0.89X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $3.40 billion, indicating an 8.7% year-over-year jump. The consensus mark for the year’s earnings is pegged at $13.41 per share, indicating a rise of 24.6%.
The Zacks Consensus Estimate for fiscal 2028 sales implies 9.1% year-over-year growth and the same for earnings suggests a rise of 18.1%.
Image Source: Zacks Investment Research
EPS estimates for fiscal 2027 and 2028 have moved north over the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Carpenter Technology Sustain Its Record Operating Income?
Key Takeaways
Carpenter Technology Corporation (CRS - Free Report) achieved a record adjusted operating income of $196 million in the first quarter of fiscal 2027, marking its most profitable first quarter on record. The upside was driven by strong demand in the aerospace and defense end-markets, as well as ongoing improvements in the product mix.
Carpenter Technology has been demonstrating its recovery growth trajectory through fiscal 2023, with increased productivity across the company’s facilities. The company has continued to advance its earnings growth through higher productivity, improved product mix and disciplined pricing across operations. The company completed fiscal 2026 with adjusted operating income of $702 million, up 34% from fiscal 2025 and marking its most profitable year.
With record operating performance and strengthening demand signals, the company maintained its fiscal 2027 operating income outlook of $850-$880 million, suggesting growth of 21-25% from that reported in fiscal 2026.
The company expects expansion beyond fiscal 2027, supported by strengthening market dynamics and additional capacity. It reaffirmed its fiscal 2029 operating income target of $1.2-$1.3 billion, supported by higher volumes, productivity improvements, product-mix optimization, pricing realization and contributions from its brownfield expansion.
An upbeat outlook and a consistent performance have set an optimistic tone for the upcoming quarters.
Operating Performance & Outlook of Other Steel Stocks
ATI Inc. (ATI - Free Report) is seeing consistent momentum in the non-residential construction market. Demand in non-residential construction markets was healthy in 2025 and the momentum is expected to continue this year, driving its earnings and cash flows. Strong aerospace and defense demand, favorable pricing and higher commercial jet engine sales supported 26.5% growth in revenues in the third quarter.
For 2026, ATI raised its adjusted EBITDA guidance to $1.19-$1.2 billion from the previous $1.135-$1.185 billion. The midpoint increased by $35 million, following a $125-million upward revision in the preceding quarter. ATI attributed the stronger outlook to sustained demand supported by long-term agreements, differentiated manufacturing capabilities and disciplined operational execution. ATI expects these factors to support growth in 2027.
Commercial Metals Company (CMC - Free Report) is gaining from healthy demand across Commercial Metals’ major North American product lines. Commercial Metals is also using price increases across mill products to address higher scrap costs.
Backed by its focus on transformation, the company expects to generate structurally higher margins and enhanced free cash flow. Commercial Metals anticipates fiscal 2029 core EBITDA to be $1.65-$1.80 billion, suggesting a surge of 106% at mid-point from $837 million delivered in 2025. The core EBITDA margin is expected to be 15-16%. The company expects to generate a free cash flow of $1.38-$1.53 billion in fiscal 2029.
CRS’s Price Performance, Valuations & Estimates
Carpenter Technology’s shares have slipped 7.7% over the past year compared with the industry’s fall of 3%. In comparison, the Zacks Basic Materials sector and the S&P 500 have returned 12.7% and 9.4%, respectively.
Image Source: Zacks Investment Research
Carpenter Technology is trading at a forward price/sales ratio of 4.20X compared with the industry's 0.89X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2027 sales is pegged at $3.40 billion, indicating an 8.7% year-over-year jump. The consensus mark for the year’s earnings is pegged at $13.41 per share, indicating a rise of 24.6%.
The Zacks Consensus Estimate for fiscal 2028 sales implies 9.1% year-over-year growth and the same for earnings suggests a rise of 18.1%.
Image Source: Zacks Investment Research
EPS estimates for fiscal 2027 and 2028 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.