Kennametal pullback a buying opportunity, says Barrington Barrington believes Kennametal's organic volumes are currently bottoming and recommends buying the stock on today's pullback. The firm thinks Kennametal can see strong earnings over the next few years following this morning's guidance reset and keeps an Outperform rating on the stock.
Kennametal sees FY16 EPS $1.70-$2.00, consensus $2.00 The FY16 EPS guidance includes foreign currency headwinds of 30c-35c due to continued strength of the U.S. dollar. Sees FY16 organic sales to decline 1%-3%. Sees FY16 revenue down 7%-9%, consensus $2.63B. Sees restructuring benefits to range from $80M-$90M in 2016. Sees FY16 to generate cash flow from operating activities $275M-$310M. Sees FY16 CapEx $160M-$175M. Sees FY16 free operating cash flow $115M-$135M.
Kennametal: Restructuring programs to produce ongoing savings of $115M-$135M The previously announced restructuring programs are expected to produce combined annual ongoing pre-tax permanent savings of $115M-$135M. In total, pre-tax charges for these initiatives are expected to be approximately $185M-$205M.