Kennametal Inc.’s (NYSE:KMT) Intrinsic Value Is Potentially 57% Above Its Share Price
Key Insights
- Kennametal’s estimated fair value is US$38.67 based on 2 Stage Free Cash Flow to Equity
- Current share price of US$24.70 suggests Kennametal is potentially 36% undervalued
- Analyst price target for KMT is US$22.19 which is 43% below our fair value estimate
Today we’ll do a simple run through of a valuation method used to estimate the attractiveness of Kennametal Inc. (NYSE:KMT) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today’s value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Models like these may appear beyond the comprehension of a lay person, but they’re fairly easy to follow.
We generally believe that a…
