I’ve had pretty mixed feelings about Carpenter Technology (CRS) for some time. In my last write-up
on this specialty alloys company, I thought the shares looked
undervalued, but I also thought the company really needed to show some
improvement in execution before the Street would get behind it. While
the shares did break out over $50 in the interim (up about 25% from the
price of that last article), weak nickel prices and concerns about
end-market demand have once again weighed on the shares and net-net, the
shares are close to where they were at the time of that last article.
I
like the progress that Carpenter has made with winning qualifications
for its Athens facility, though it will take time for these
qualifications to turn into revenue and profits. I also like the
investments the company is making in areas like electrification-enabling
alloys (including soft magnetics) and powered metals for additive
manufacturing, but here again, it will take time for these efforts to
really scale up. The good news? The company has a strong backlog but the
shares are still undervalued on a historical median EBITDA multiple.
Continue here:
Carpenter Technology Undervalued And Making Progress, But Where's The Spark?
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