Research · Sep 3, 2026
[CRS] Carpenter Technology Thesis 2026: Aerospace Alloy Demand Drives Margin to Thirty Percent
Carpenter Technology Corporation FY25 (Jun year-end) revenue $2.88B (+4%); op income $522M (+62%); NI $376M (+102%); EPS $7.42 (+101%). Op margin from 11.7% FY24 to 18.1% FY25 (+640bp). Q4 SAO segment net sales (ex surcharge) $548M; adj op margin 30.5% (vs 25.2% YoY); op income $167M (+19% YoY / +10% sequential). Q4 PEP segment net sales (ex surcharge) $97.1M (-5% YoY / flat sequential); op income $11.7M. Q4 adj op income $151M (+21% YoY / +10% sequential). Aerospace/Defense Q4 sales +3% QoQ / +2% YoY (engine sales +5%). Energy Q4 +27% QoQ / +22% YoY (power generation accelerating). Medical Q4 -16% YoY / +6% QoQ recovering. Adj FCF $287.5M FY25; $201.3M Q4 alone (70% of annual). $400M stock repurchase program; $101.9M FY25 buyback. FY26 guide: Q1 op income $148-$152M; FY26 adj op income $660-$700M (+26-33% YoY); FY26 adj FCF $240-$280M. FY27 target: adj op income $765-$800M.