Research · Sep 3, 2026
[KMT] Kennametal Thesis 2026: Aerospace Machining Recovery Offsets EV Powertrain Structural Decline
Kennametal FY2025 (ended June 2025) revenue ~$1.97B with adj. EBITDA ~$218M at ~11.1% as aerospace machining recovery (~$395M, +6% YoY, 32% of Metal Cutting) offset continued automotive ICE softening. EV powertrain structural headwind: BEV drivetrains require ~85% fewer machined parts than ICE, reducing cutting tool consumption per vehicle. Simplification/Modernization restructuring targeting ~$100M annualized savings. FY2026 thesis: aerospace toward $440-470M on Boeing/Airbus ramp + defense programs; non-ferrous EV machining (copper motors, aluminum battery enclosures) as emerging offset; margin recovery toward 12-13% as restructuring completes.