Kennametal Inc. enters the week having just reported quarterly earnings, with short sellers in full retreat and estimate momentum running near its highest level in years — two forces pulling in the same direction for bulls.
The most striking shift is in short interest. After peaking near 4.8% of free float in late March and early April — when macro uncertainty pushed bearish positioning to its highest in the past 30-day window — shorts have unwound sharply. Short interest now stands at 3.3% of free float, down more than 31% over the past month. The pace of that decline accelerated around April 9, when approximately 1 million shares of short interest vanished in a single session. The lending market tells the same story: cost to borrow is cheap at 0.41% APR and has fallen nearly 20% this week alone. Availability remains very loose, with the borrow pool nowhere near stressed. This is not a market under squeeze pressure — it is one where bearish conviction is simply fading.
Options positioning corroborates that picture, though with a modest caveat. The put/call ratio is running at 0.21, slightly above its 20-day average of 0.17 and close to one standard deviation above the norm. That is far from alarming — the 52-week high on the PCR reached 1.27, which provides real perspective — but the small uptick does suggest a fraction of the market wants some protection in place after today's earnings event.
The Street's posture on Kennametal is one of cautious optimism held at arm's length. The mean analyst price target is $37.57 against a closing price of $37.51 — essentially no upside priced in at current levels. The last confirmed analyst moves came in February: Morgan Stanley lifted its target to $36 while holding Equal-Weight, Barclays raised to $40 with the same neutral stance, and UBS pushed to $39, also Neutral. Jefferies stands apart with an outright Buy and a $40 target, upgraded in January. JP Morgan maintained Underweight with a $37 target. The consensus is a group of firms that acknowledge the stock has re-rated meaningfully — targets across the group rose $10-$14 from their prior levels — but have not followed with upgraded conviction. Analyst data is as of early April; there have been no recent changes to flag. With the analyst return potential at just 0.16%, the Street is essentially marking the stock fairly valued at these levels.
The factor scores tell a more constructive underlying story. EPS momentum ranks in the 95th percentile on a 90-day basis and the 79th percentile over 30 days — meaning Kennametal's forward estimates have been rising faster than the vast majority of peers. The EPS surprise score ranks in the 76th percentile, reinforcing that the company has been consistently beating expectations. On an EV/EBITDA basis, the stock trades at approximately 8.2x — a modest multiple for an industrial machinery business, particularly one generating around $214 million in operating cash flow. The RSI14 at 46 is neutral, neither overbought nor oversold heading into the post-earnings window.
Institutional ownership has been broadly stable. Vanguard remains the largest holder at 11.5% of shares, with a marginal add last quarter. The most notable move from late 2025 was FMR (Fidelity) building its position by over 1.8 million shares. The insider ledger is dominated by sells — the Chief Administration Officer sold nearly $1.6 million of stock in February, and the General Counsel disposed of approximately $990,000 — though these are the kind of scheduled post-earnings-window sales common at mid-cap industrials rather than a directional signal.
The stock pulled back 4.4% on the week before bouncing 2% on Tuesday, closing at $37.51. Closest correlated peers diverged: TKR and LECO both gained around 2.6% on the week, while PH fell more than 9%. The post-earnings session and where the next analyst target revisions land — given that most coverage is clustered between $36 and $40 — will be the key tell for whether the stock can sustain a breakout through the top of its current analyst range.
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