KMT
Kennametal Inc.
$29.53
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 55.5% below fair value
You pay
$29.53
Bear
$53.04
Fair
$66.30
Bull
$79.56
Bear
$53.04
+79.6%
$4.42 × 12x P/E
Fair
$66.30
+124.5%
$4.42 × 15x P/E
Bull
$79.56
+169.4%
$4.42 × 18x P/E
Adjust Assumptions
15.0x
4.42$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
6.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$36.38
Divergence from AlphaVal
82%
Summary
Applying a 15x P/E to adjusted EPS of $4.42, the base-case value is $66.30 per share.
Warnings
Wall Street's average price target is $36.38 (from 24 analysts). Our estimate is 82% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples