Kennametal Shares Surge on Robust Earnings and Upgraded Outlook

Shares of industrial tooling specialist Kennametal are experiencing significant momentum, fueled by quarterly results that comfortably exceeded market forecasts and an enhanced full-year guidance. This performance is drawing increased attention from the institutional investment community.

The company's financial report for the first quarter of fiscal 2026, released on November 5, presented a strong picture. Kennametal posted earnings per share (EPS) of $0.34, surpassing the analyst consensus estimate of $0.24 by a solid $0.10. Revenue saw a year-over-year increase of 3.3%, reaching $497.97 million, which also topped expectations. Furthermore, adjusted net income demonstrated growth, climbing from $22.6 million to $26.3 million.

Revised Guidance and Strategic Execution

In response to this stronger-than-anticipated start, management has raised its outlook for the entire 2026 fiscal year. Revenue is now projected to land between $2.1 billion and $2.17 billion. The forecast for adjusted earnings per share has been lifted to a range of $1.35 to $1.65. Company leadership attributes this positive adjustment to effective pricing strategies implemented to counterbalance increased raw material costs, notably for tungsten.

A segment-level breakdown reveals the drivers of growth:
* The Metal Cutting division reported robust sales expansion. This was led by an 18% surge in demand from the aerospace and defense industries, coupled with a 15% rise in the energy sector, which is benefiting from heightened demand related to data center infrastructure.
* Despite the impact of a divestiture, the Infrastructure segment managed to deliver 3% organic growth.

Should investors sell immediately? Or is it worth buying Kennametal?

Capital Allocation and Institutional Confidence

Kennametal's financial health and forward-looking statements are resonating with major investors. Notably, JPMorgan Chase & Co. increased its stake by 33.4% during the second quarter, bringing its total holdings to 739,836 shares. Several other institutional entities have also adjusted their positions in the company.

The firm continues to return capital to its shareholders. During Q1, it repurchased approximately 475,000 of its own shares for about $10 million and distributed $15 million in dividend payments. Planned capital expenditures for the year remain around $90 million.

The market's reaction has mirrored this fundamentally positive news flow. The stock closed at $27.85 on Friday, marking an advance of over 9% across the preceding two-week period. This price action places the shares firmly above their key 50-day and 200-day moving averages. The sustainability of this upward trend will face its next test with the release of second-quarter fiscal 2026 results, anticipated in late January 2026.