U.S. stocks edge higher; solid earnings season continues
Investing.com -- Shares of Kennametal Inc. (NYSE:KMT) climbed 3.2% after President and CEO Sanjay Chowbey made a significant purchase of the company’s stock. On February 11, Chowbey acquired 10,000 shares at an average price of $21.753, totaling around $217,530, a filing with the Securities and Exchange Commission revealed.
The CEO’s investment comes at a time when Kennametal’s stock is deemed to be in oversold territory, having experienced a notable decline over the past three months. This move by Chowbey has been interpreted by some as a vote of confidence in the company’s prospects, as he now directly holds 77,595.483 shares, including 319.48 shares in the 401(k) plan.
Despite the positive reaction to Chowbey’s purchase, Kennametal has faced financial headwinds recently. The company’s second-quarter earnings report fell short of expectations, with an adjusted EPS of $0.25 against an estimated $0.26 and revenue of $482.05 million, which did not meet the consensus forecast of $488.33 million. The disappointing performance led to a reduction in the full-year outlook, primarily due to weaker demand in Europe, the Middle East, and Africa.
In response to the earnings miss, Loop Capital revised its stance on Kennametal, lowering the price target to $21.00 from $26.00 while maintaining a Hold rating. However, the company has been actively pursuing cost reduction measures, which are expected to have a more pronounced impact on financial results by the end of the fiscal year.
Kennametal, with a market cap of $1.68 billion, has a history of consistent dividend payments, boasting a 3.72% dividend yield and maintaining payouts for 55 consecutive years. Investors and analysts will be watching closely to see if the CEO’s stock purchase and the company’s cost-saving initiatives can steer Kennametal back towards a path of growth in the coming quarters.
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