DCF Tool

KMT

Kennametal Inc. – Machine Tool Manufacturing
With over 80 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 9,000 employees are helping customers in more than 60 countries stay competitive. Kennametal generated nearly $1.9 billion in revenues in fiscal 2020.
Analysis Results
Intrinsic Value $10.44
Latest Price $27.66
Relative Value 165% overvalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -12.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -12.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 104 95.3
2023 90.6 76.5
2024 79.2 61.4
2025 69.2 49.3
2026 60.4 39.5
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 899 million. This corresponds to a present value of 541 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 322 million. Adding in the terminal value gives a total present value of 863 million.

There are presently 82.6 million outstanding shares, so the intrinsic value per share is 10.44.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,004,807,000
Current Cash 154,047,000
Current Liabilities 437,394,000
Current Debt 8,365,000
Non-Cash Working Capital (NCWC) 421,731,000
Change in NCWC -14,685,000
EBIT 131,229,000
Tax Provision 6,243,000
Depreciation and Amortization 126,488,000
Capital Expenditure -127,302,000
Unlevered Free Cash Flow 103,059,683
Current Assets 1,440,812,000
Current Cash 606,684,000
Current Liabilities 898,080,000
Current Debt 500,368,000
Non-Cash Working Capital (NCWC) 436,416,000
Change in NCWC -110,827,000
EBIT 127,224,000
Tax Provision 7,007,000
Depreciation and Amortization 119,860,000
Capital Expenditure -244,151,000
Unlevered Free Cash Flow -114,901,000
Current Assets 1,190,827,000
Current Cash 182,015,000
Current Liabilities 461,726,000
Current Debt 157,000
Non-Cash Working Capital (NCWC) 547,243,000
Change in NCWC 43,561,000
EBIT 342,934,000
Tax Provision 63,359,000
Depreciation and Amortization 112,052,000
Capital Expenditure -212,343,000
Unlevered Free Cash Flow 216,391,943
Current Assets 1,546,166,000
Current Cash 556,153,000
Current Liabilities 886,531,000
Current Debt 400,200,000
Non-Cash Working Capital (NCWC) 503,682,000
Change in NCWC 40,963,000
EBIT 319,472,000
Tax Provision 69,981,000
Depreciation and Amortization 108,680,000
Capital Expenditure -171,004,000
Unlevered Free Cash Flow 216,825,046
Current Assets 1,113,901,000
Current Cash 190,629,000
Current Liabilities 461,478,000
Current Debt 925,000
Non-Cash Working Capital (NCWC) 462,719,000
Change in NCWC -25,663,000
EBIT 177,962,000
Tax Provision 29,895,000
Depreciation and Amortization 107,656,000
Capital Expenditure -118,018,000
Unlevered Free Cash Flow 76,957,775
Current Assets 1,075,341,000
Current Cash 161,579,000
Current Liabilities 427,275,000
Current Debt 1,895,000
Non-Cash Working Capital (NCWC) 488,382,000
Change in NCWC -197,628,000
EBIT 100,330,000
Tax Provision 25,313,000
Depreciation and Amortization 117,466,000
Capital Expenditure -110,697,000
Unlevered Free Cash Flow -90,529,000
Current Assets 1,258,546,000
Current Cash 105,494,000
Current Liabilities 482,744,000
Current Debt 15,702,000
Non-Cash Working Capital (NCWC) 686,010,000
Change in NCWC -178,618,000
EBIT 224,412,000
Tax Provision -16,654,000
Depreciation and Amortization 131,664,000
Capital Expenditure -100,939,000
Unlevered Free Cash Flow 76,519,000
Current Assets 1,525,196,000
Current Cash 177,929,000
Current Liabilities 562,756,000
Current Debt 80,117,000
Non-Cash Working Capital (NCWC) 864,628,000
Change in NCWC 165,745,000
EBIT 281,040,000
Tax Provision 66,611,000
Depreciation and Amortization 130,222,000
Capital Expenditure -117,376,000
Unlevered Free Cash Flow 377,814,482
Current Assets 1,499,473,000
Current Cash 377,316,000
Current Liabilities 467,593,000
Current Debt 44,319,000
Non-Cash Working Capital (NCWC) 698,883,000
Change in NCWC 35,872,000
EBIT 296,394,000
Tax Provision 59,693,000
Depreciation and Amortization 113,104,000
Capital Expenditure -82,835,000
Unlevered Free Cash Flow 296,173,222
Current Assets 1,282,962,000
Current Cash 116,466,000
Current Liabilities 578,622,000
Current Debt 75,137,000
Non-Cash Working Capital (NCWC) 663,011,000
Change in NCWC 110,549,000
EBIT 416,409,000
Tax Provision 79,136,000
Depreciation and Amortization 104,073,000
Capital Expenditure -113,036,000
Unlevered Free Cash Flow 433,493,558

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