Abstract

Kennametal will report fiscal third-quarter results on May 6, 2026 Pre-Market; our preview synthesizes the company’s latest quarterly data, the current quarter’s forecasts, and institutional commentary to frame the likely revenue, earnings, and margin path alongside the most debated near-term stock drivers.

Market Forecast

Consensus for the current fiscal quarter points to revenue of 564.93 million US dollars, up 15.19% year over year, with estimated EPS at 0.67, rising 182.22% year over year, and EBIT projected at 67.33 million US dollars, up 95.41% year over year. There is no explicit gross margin or net margin guidance, but the combination of double‑digit revenue growth and outsized EBIT and EPS growth suggests an expected margin uplift versus the prior-year quarter.

The main business continues to be the Metal Cutting segment, where expected product mix, price realization, and cost controls point to stable-to-improving profitability and solid shipment conversion from orders. The most promising near-term potential is centered where the company delivered 331.06 million US dollars last quarter in its larger segment, with company-level revenue projected to grow 15.19% year over year, signaling room for this franchise to capture a disproportionate share of incremental growth if execution on pricing and throughput remains on track.

Last Quarter Review

In the prior fiscal quarter, Kennametal reported revenue of 529.53 million US dollars, a gross profit margin of 32.93%, GAAP net profit attributable to shareholders of 33.89 million US dollars, a net profit margin of 6.40%, and adjusted EPS of 0.47, which increased 88.00% year over year.

Net profit improved meaningfully quarter over quarter, with a 45.44% increase versus the preceding quarter, reflecting effective execution on price, cost, and operating efficiency. The main businesses delivered 331.06 million US dollars in Metal Cutting and 198.47 million US dollars in Infrastructure; at the company level, revenue rose 9.85% year over year, supported by favorable price/mix and disciplined cost control.

Current Quarter Outlook

Main business: Metal Cutting

Metal Cutting remains the largest revenue contributor and the key earnings engine, where mix of higher-value tooling and wear components can translate incremental revenue into above-line profit improvements. Operationally, a continuation of stable plant utilization and timely supply from key inputs should support shipment execution against the order book. With price carryover from earlier actions and selective updates aligned to input dynamics, the segment’s price/mix should remain net positive to revenue growth.

The company’s last quarter gross margin of 32.93% creates a reasonable starting point; if forecast EBIT growth (95.41% year over year) materializes at the company level alongside a 15.19% revenue increase, the math points to improved contribution from Metal Cutting. Execution levers in this segment typically include disciplined product line management, SKU rationalization and bundling where appropriate, and focus on higher-throughput categories that support utilization and cost absorption. Given the segment’s scale, even modest efficiency and mix gains can deliver sizable incremental margins, which is consistent with the consensus pattern of EBIT and EPS growing faster than revenue.

Most promising business: Infrastructure

Infrastructure’s performance tends to be shaped by throughput, project timing, and the cadence of larger orders. The prior quarter’s 198.47 million US dollars in segment revenue establishes a good baseline for evaluating the current quarter’s conversion. A step-up in plant-level execution, including cycle-time management and improved on-time delivery on multi-line projects, can materially support contribution margin, especially when fixed-cost absorption improves.

From a pricing standpoint, Infrastructure’s realized price changes and product mix discipline remain important. A constructive outlook for company-level EBIT and EPS versus revenue suggests Infrastructure has room to contribute incrementally through higher-margin product shipments and cost-control spillover benefits. If order intake normalizes at healthy levels and projects move smoothly from order to shipment without unusual deferrals, Infrastructure can reinforce the company’s consolidated margin trajectory this quarter.

Stock-price drivers this quarter

The first swing factor is margin translation versus revenue growth. With forecasts calling for 15.19% revenue growth and substantially faster growth in EBIT and EPS, the market will look for evidence of price/mix realization and cost/productivity execution that can sustain expansion in both gross and operating margins. Any deviation—whether from input-cost volatility, mix slippage, or late-quarter project deferrals—could change the slope of earnings power and drive the stock reaction around the print.

The second swing factor is operating leverage and incremental margin. If the company converts incremental revenue at attractive incremental margins, that provides tangible proof that the cost base is set appropriately for demand and that productivity programs continue to deliver. Conversely, if the company needs to spend to secure or accelerate delivery timelines, that could temporarily compress conversion and be reflected either in gross margin or SG&A as a percentage of sales.

The third swing factor is the trajectory of EPS versus EBIT. Consensus EPS growth of 182.22% year over year far outpaces the revenue growth rate, implying cleaner below-the-line dynamics relative to the prior-year quarter alongside stronger operating profit. The degree to which the company demonstrates clean EPS quality—driven by operating results rather than one-time items—can shape investor conviction in the sustainability of that EPS run-rate into subsequent quarters.

Analyst Opinions

The majority of preview-style commentary collated since January 1, 2026 leans bullish, with supportive institutions highlighting near-term earnings upside potential driven by margin expansion and improved operating execution. Morgan Stanley raised its expectations for the current fiscal third quarter, pointing to near-term operating margin expansion aided by input dynamics and stronger execution; it lifted its fiscal Q3 adjusted EPS preview to 0.58 and raised the price target to 36 US dollars while maintaining an equalweight stance. That preview also framed a higher full-year adjusted EPS path of 2.23, reflecting the conviction that actions on pricing, mix, and productivity can sustain earnings momentum beyond a single quarter.

In addition, UBS maintained a neutral stance but increased its price target to 39 US dollars, a move that aligns with a more constructive view on earnings durability as price/mix and operational discipline support improved profitability. While the rating remains neutral, the target increase signals recognition of the improving earnings algorithm laid out in forecasts—namely, mid-teens revenue growth coupled with outsized year-over-year gains in EBIT and EPS. Together with the Morgan Stanley preview, the tone of institutional commentary sits on the supportive side, emphasizing margin capture and operating leverage as the dominant forces for the current quarter’s setup.

The bullish perspective centers on three core arguments for this print. First, the forecast pair of mid-teens revenue growth and near‑doubling of EBIT year over year implies that pricing and mix remain net positive and that cost discipline is translating into high incremental margins. Second, the expected acceleration in EPS reflects not only operating improvements but also a cleaner below‑the‑line picture relative to the prior‑year quarter, which reinforces the quality of earnings. Third, segment-level contributions—anchored by Metal Cutting’s scale and Infrastructure’s project cadence—are positioned to support consolidated margin expansion if order-to-shipment conversion remains smooth.

Analysts in the bullish camp also point to the improving spread between price realization and input costs, an area that has been under close scrutiny. The combination of price carryover, targeted product mix actions, and operational improvements has the potential to more than offset puts and takes in inputs. This is the crux of the earnings debate: whether the company can continue to expand margins at a pace faster than sales growth. The preview consensus, reinforced by the more constructive institutional notes, expects that it can do so in the current quarter, which explains the positive skew in outlooks.

On balance, the tilt of opinions favors the constructive case into the release on May 6, 2026, emphasizing the probability of margin expansion and EPS outperformance relative to the prior-year quarter. The preview narrative is not uniform, but the weight of the commentary tilts toward upside on profitability metrics—precisely the levers that are most likely to move the stock if delivered. In short, the prevailing institutional view is that this quarter’s setup offers a favorable earnings translation of price, mix, and productivity into EBIT and EPS growth that outpaces revenue, with Metal Cutting anchoring the foundation and Infrastructure contributing to the incremental margin story.