Carpenter Technology Corporation CRS shares scaled a new 52-week high of $207.99 on Friday before closing the session lower at $206.58.
CRS has a market capitalization of $10.3 billion. The company’s shares have skyrocketed 209.7% in the past year, outperforming the industry’s growth of 65.4% and the S&P 500 index’s rise of 26.5%.
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What’s Aiding Carpenter Technology’s Stock Performance?
Strong Backlog Levels: In the first quarter of fiscal 2025, Carpenter Technology’s backlog was at near-record levels, backed by strong booking growth. The company expects continued growth across its end-use markets, especially in Aerospace, Defense and Medical applications, which is expected to boost its fiscal 2025 results. Backed by solid backlog levels, the company's near and long-term outlooks for each end-use market remained positive.
CRS achieved solid earnings improvements, courtesy of higher shipment volumes, increased productivity, product mix optimization and pricing actions in the first quarter of fiscal 2025. In the first quarter of fiscal 2025, the company achieved an adjusted operating income of $117 million, marking its most profitable first quarter on record.
Solid Growth in End-Markets: Carpenter Technology has been witnessing broad-based demand recovery in the aerospace and defense, and medical end-use markets, which will continue through the remainder of fiscal 2025. Aerospace is gaining from the pickup in global travel.
Demand continues to accelerate across all the aerospace submarkets as the supply chain ramps up to meet steadily increasing travel demand. Also, additional capacity at its Athens facility will position the company to capture incremental growth in aerospace.
The company previously expected operating income to double from the fiscal 2019 level to fiscal 2027. At the end of the fourth quarter of fiscal 2024, it revised its objective of $460-$500 million in operating income from fiscal 2027 to fiscal 2025. Currently, CRS expects operating income to be at the high end of the provided range for fiscal 2025.
The upside will primarily be driven by higher prices, improved product mix and increased volumes. The increase in operating income will provide significant cash flow over the next several years, adding value to the company’s stockholders.
Solid Balance Sheet: Carpenter Technology’s total liquidity (including cash and available credit facility borrowings) was $499 million at the end of the first quarter of fiscal 2025. This consisted of $150 million of cash in hand and $349 million of available borrowings under the credit facility. Its long-term debt was $694.5 million at the end of the first quarter of fiscal 2025.
CRS’s board of directors authorized a share repurchase program of up to $400 million.
The company has identified additional actions to preserve and manage cash and plans to deploy those actions as and when necessary. It continues to realize price and share gains through contract renewals and price increases in its transactional business. The company continues to implement the Carpenter operating model to address any short-term challenges and increase productivity across facilities.
CRS’ Zacks Rank & Other Stocks to Consider
Carpenter Technology currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks from the basic materials space are ICL Group Ltd. ICL, Fortuna Mining Corp. FSM and MAG Silver Corp. MAG. These three stocks carry a Zacks Rank #2 (Buy) at present.
ICL Group has an average trailing four-quarter earnings surprise of 18.1%. The Zacks Consensus Estimate for ICL’s 2024 earnings is pegged at 37 cents per share. Its shares gained 35.4% last year.
Fortuna Mining has an average trailing four-quarter earnings surprise of 53.6%. The Zacks Consensus Estimate for the company’s 2024 earnings is pegged at 48 cents per share. FSM shares rose 37.3% last year.
MAG Silver has an average trailing four-quarter earnings surprise of 17.1%. The Zacks Consensus Estimate for the company’s 2024 earnings is pegged at 75 cents per share. MAG shares surged 66.8% last year.
5 Stocks Set to Double
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Today, See These 5 Potential Home Runs >>Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
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ICL Group Ltd. (ICL) : Free Stock Analysis Report
MAG Silver Corporation (MAG) : Free Stock Analysis Report
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