KeyBanc Cuts Estimates on Kennametal (KMT)

January 7, 2009 8:57 AM EST

KeyBanc cuts their FY09 estimate from $2.28 to $2.10 and reduces their FY10 estimate from $2.58 to $2.50 on Kennametal (NYSE: KMT). The firm maintains their Hold rating.

The firm said, "We continue to believe the historical relationship between KMT's monthly orders and its net income is instructive (as shown in our October downgrade note), and while KMT has made significant progress in diversifying away from North American and Metalworking end markets, we note the downturn in European and Asian Industrial Production indices are matching or exceeding that in the United States. Therefore, as we consider KMT's ~75% gain from the November low (vs. ~24% for the S&P 500) in the context of a potential quarterly miss, guidance reduction, and ongoing end market deterioration, we believe investors with a higher cost basis may want to use this strength to reduce exposure to the name."

Kennametal, Inc. supplies tooling, components and materials consumed in production processes.

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