UPDATE: Bank of America Downgrades Kennametal on Valuation

In a report published Tuesday, Bank of America analyst Ross Gilardi downgraded the rating on

from Buy to Neutral, but raised the price target from $46.00 to $50.00. In the report, Bank of America noted, “We raise our PO from $46 to $50 as we still see some modest upside on the back of better orders in August, but downgrade to Neutral based largely on valuation. The stock is now trading at 14.8x FY14 EPS estimate, in line with an historical multiple of 14-15x. The acquisition of Allegheny Tech (ATI)'s Tungsten Materials business provides some good long-term opportunities, but is unlikely to be accretive before FY15. Among the short cycle names, we prefer Timken.” Kennametal closed on Monday at $46.39.