Benchmark maintains Buy on Carpenter Tech with $250 target

Published 21/04/2025, 15:40
Benchmark maintains Buy on Carpenter Tech with $250 target

On Monday, Benchmark analysts maintained their Buy rating and $250.00 price target for Carpenter Technology (NYSE:CRS) shares, which currently trade at $169.71. According to InvestingPro data, analyst targets range from $200 to $300, reflecting strong confidence in the company’s potential. The firm’s analysts highlighted Carpenter Technology’s announcement of new long-term financial goals and a brownfield expansion at its Athens facility. This expansion aims to meet the growing demand for high-value alloys, which the company specializes in, and to preserve its pricing power.

Carpenter Technology has indicated a structural shortage of these alloys, and the timing of the expansion is set to coincide with this anticipated long-cycle demand. The company’s strong financial position, evidenced by its "GREAT" financial health score on InvestingPro and robust current ratio of 3.8, supports this expansion strategy. Despite the potential risks posed by tariff uncertainties, Benchmark’s analysts expect the immediate effects to be reflected in extended lead times for Carpenter Technology’s products, which currently stand at 65 weeks. This lengthy lead time underscores the scarcity and demand for the company’s offerings.

The analysts’ third-quarter earnings per share (EPS) estimate for Carpenter Technology is $1.73, aligning with consensus estimates. However, they have adjusted their fourth-quarter 2025 Performance Engineered Products (PEP) segment operating income projections to account for the temporary impact of the Specialty Products Solutions (SPS) fire on titanium rod and wire demand. Despite this setback, they anticipate a recovery in demand for Carpenter Technology’s rod and wire products, driven by the critical nature of fasteners in the aerospace supply chain and Boeing (NYSE:BA)’s efforts to compensate for the lost SPS capacity.

The adaptability of Carpenter Technology’s alloy products is considered a significant asset, especially during periods of market uncertainty. The company’s strategic initiatives and the inherent strength of its product offerings contribute to Benchmark’s positive outlook on the stock. This strength is reflected in the company’s impressive 119% return over the past year. Investors seeking deeper insights into Carpenter Technology’s performance can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Carpenter Technology Corporation reported its Q2 FY2025 earnings, revealing an earnings per share (EPS) of $1.66, which exceeded the forecast of $1.62. However, the company’s revenue of $676.9 million fell short of the projected $724.42 million. Despite the revenue miss, operating income surged by 70% year-over-year, reaching $119 million. Additionally, Fitch Ratings upgraded Carpenter Technology’s Issuer Default Rating and senior unsecured debt rating from ’BB’ to ’BB+’, with a stable outlook, highlighting expectations of sustained EBITDA leverage and margins. In governance developments, the company expanded its Board of Directors by appointing Julie A. Beck, bringing extensive financial leadership experience to the team. Furthermore, Carpenter Technology declared a quarterly dividend of $0.20 per share, continuing its practice of returning value to shareholders. These recent developments underscore Carpenter Technology’s strategic positioning and operational efficiency in the specialty alloy market.

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