UPDATE: J.P. Morgan Downgrades Kennametal to Neutral, Reiterates $46 PT Following FQ4'13 Report

In a report published Friday, J.P. Morgan analyst Ann Duignan downgraded the rating on

from Overweight to Neutral, but reiterated the $46.00 price target. In the report, J.P. Morgan noted, “KMT posted a slightly upside FQ4'13 report, and issued its FY'14 EPS outlook; the stock was up 2% vs. the S&P 500 flat. KMT reported FQ4 continuing EPS of $0.76 vs. consensus of $0.74 and JPMe of $0.70. KMT issued guidance for FY'14 continuing EPS of $2.90-$3.10 (mp $3.00) vs. prior consensus of $3.17 and JPMe of $3.16. FY'14 organic revenue outlook is for up 5%-7% and total revenue growth of 4%-6% (vs. JPMe 2.5% total revenue growth) vs. -8% organic growth in FQ4. Management also announced that the company's Board has authorized an increased share repurchase program of up to 17MM shares (vs. 12MM prior). We are downgrading KMT from Overweight to Neutral on valuation, as our new lowered estimates indicate fair value around the current share price. While improving global IP may provide upside to earnings and the multiple, until the global economic recovery picks up steam, we believe the stock is close to fairly valued.” Kennametal closed on Thursday at $42.44.