Is Kennametal (KMT) A Bargain As Russell Index Additions Draw Fresh Attention?

Why Kennametal’s latest HR leadership change matters for shareholders

Kennametal (KMT) has appointed Amanda Cole as Chief Human Resources Officer, adding a fresh leadership voice just as the stock gains visibility through multiple Russell index inclusions and renewed attention on its earnings outlook.

For investors, this combination of a senior HR transition and broader index presence raises questions about how talent, culture and capital market exposure might interact with the company’s existing operations in metal cutting and infrastructure tools.

See our latest analysis for Kennametal.

Kennametal’s 1 year total shareholder return of 40.39% and 3 year total shareholder return of 23.09% contrast with a 90 day share price decline of 15.32%. This suggests earlier momentum has cooled despite index additions and a positive earnings narrative.

If this kind of industrial tools story has your attention, it can be helpful to see what else is moving in adjacent supply chains through the 35 power grid technology and infrastructure stocks

Bulls point to Kennametal’s Russell index additions, solid recent shareholder returns, and analyst views of an attractive P/E and PEG as evidence that the stock is mispriced. Bears, on the other hand, highlight the 90-day decline. Which case aligns with the valuation work that follows?

Most Popular Narrative: 11% Undervalued

The most followed narrative on Kennametal compares a fair value of $37.19 to the last close at $33.11, framing the recent pullback as a potential pricing gap to watch rather than a verdict on the business.

The company is actively rightsizing capacity and executing structural cost reductions (including plant closures and workforce optimization), which are projected to produce $125 million in run-rate savings by fiscal 2028, supporting significant net margin improvement as volume returns.

Read the complete narrative.

Want to understand why this narrative still lands on an 11% discount to fair value? It leans heavily on steadier revenue growth, thicker margins, and a lower future earnings multiple than many industrial peers usually enjoy. The tension between modest growth assumptions and that earnings ramp is where the story gets interesting.

Result: Fair Value of $37.19 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Kennametal’s narrative can shift quickly if end markets such as Transportation and Oil & Gas stay weak, or if expected cost savings fail to materialize.

Find out about the key risks to this Kennametal narrative.

Another View: Kennametal Through a Cash Flow Lens

The earlier narrative around Kennametal leans on earnings forecasts and a fair value of $37.19, but the SWS DCF model tells a different story. On that approach, Kennametal’s estimated value sits at $25.67, well below the current $33.11 share price. This frames the stock as overvalued instead of undervalued. Which set of assumptions feels more realistic to you?

For a closer look at how those long term cash flow assumptions are built and discounted, take a moment to walk through the full SWS DCF work up in the Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Kennametal for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 44 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If the mix of optimism and caution around Kennametal leaves you undecided, consider acting while the data is fresh and carefully weigh the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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