Barrington Research Maintains Outperform, $55 Target on Kennametal

In a published research note, Barrington Research reiterates its Outperform rating and $55 price target on Kennametal, Inc. KMT as organic orders growth moderated to 13% from 20% for October. According to Barrington, “Our investment thesis is supported by KMT's October trend. While monthly organic orders are moderating from 20-25% down to 10-15%, we believe that Q2/12 sales and profits will hit our targets. Tungsten prices have begun to moderate as well for the first time in close to a year. KMT should see gross margin expansion due to volume leverage and profitability improvement activities. In our view, KMT has become a higher ROIC business, which should result in a higher valuation.” KMT traded at $39.03 at market close on Friday.