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HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
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Relative valuation derived from Materials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
20.5%
Sector: 3.3%
Dividend Analysis audit
GROWTH
0.25%
Trailing Yield
$0.25
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
13%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, CARPENTER TECHNOLOGY CORP (CRS) receives a "Hold" rating with a composite score of 48.2/100, ranked #600 out of 4446 stocks. Key factor scores: Quality 50/100, Value 41/100, Momentum 71/100. This is quantitative analysis only — not investment advice.
CARPENTER TECHNOLOGY CORP (CRS) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does CARPENTER TECHNOLOGY CORP Do?
Carpenter Technology Corporation manufactures, fabricates, and distributes specialty metals worldwide. It operates through two segments, Specialty Alloys Operations and Performance Engineered Products. The company offers specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels, as well as additives, and metal powders and parts. It serves aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company was founded in 1889 and is headquartered in Philadelphia, Pennsylvania. CARPENTER TECHNOLOGY CORP (CRS) is classified as a large-cap stock in the Materials sector, specifically within the Steel Works industry. The company is led by CEO Tony R. Thene and employs approximately 4,100 people, headquartered in Wilmington, Pennsylvania. With a market capitalization of $20.1B, CRS is one of the prominent companies in the Materials sector.
CARPENTER TECHNOLOGY CORP (CRS) Stock Rating — Hold (April 2026)
As of April 2026, CARPENTER TECHNOLOGY CORP receives a Hold rating with a composite score of 48.2/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.CRS ranks #600 out of 4,446 stocks in our coverage universe. Within the Materials sector, CARPENTER TECHNOLOGY CORP ranks #32 of 284 stocks, placing it in the top quartile of its Materials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
CRS Stock Price and 52-Week Range
CARPENTER TECHNOLOGY CORP (CRS) currently trades at $435.30. The stock gained $4.09 (0.9%) in the most recent trading session. The 52-week high for CRS is $412.31, which means the stock is currently trading 5.6% from its annual peak. The 52-week low is $138.61, putting the stock 214.0% above its annual trough. Recent trading volume was 659K shares, suggesting relatively thin trading activity.
Is CRS Overvalued or Undervalued? — Valuation Analysis
CARPENTER TECHNOLOGY CORP (CRS) carries a value factor score of 41/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 52.32x, compared to the Materials sector average of 26.50x — a premium of 97%. The price-to-book ratio stands at 10.73x, versus the sector average of 2.83x. The price-to-sales ratio is 7.44x, compared to 0.74x for the average Materials stock. On an enterprise value basis, CRS trades at 37.70x EV/EBITDA, versus 6.01x for the sector.
Overall, CRS's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
CARPENTER TECHNOLOGY CORP Profitability — ROE, Margins, and Quality Score
CARPENTER TECHNOLOGY CORP (CRS) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 20.5%, compared to the Materials sector average of 3.3%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 11.6% versus the sector average of 0.6%.
On a margin basis, CARPENTER TECHNOLOGY CORP reports gross margins of 28.3%, compared to 29.8% for the sector. The operating margin is 19.7% (sector: 6.0%). Net profit margin stands at 14.2%, versus 3.0% for the average Materials stock. Revenue growth is running at 1.5% on a trailing basis, compared to 1.8% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
CRS Debt, Balance Sheet, and Financial Health
CARPENTER TECHNOLOGY CORP has a debt-to-equity ratio of 77.0%, compared to the Materials sector average of 41.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 4.25x, indicating strong short-term liquidity. Total debt on the balance sheet is $690M. Cash and equivalents stand at $232M.
CRS has a beta of 1.49, meaning it is more volatile than the broader market — a $10,000 investment in CRS would be expected to move 48.5% more than the S&P 500 on any given day. The stability factor score for CARPENTER TECHNOLOGY CORP is 48/100, reflecting average volatility within the normal range for its sector.
CARPENTER TECHNOLOGY CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, CARPENTER TECHNOLOGY CORP reported revenue of $2.87B and earnings per share (EPS) of $2.10. Net income for the quarter was $407M. Gross margin was 28.3%. Operating income came in at $565M.
In Q2 2026, CARPENTER TECHNOLOGY CORP reported revenue of $728M and earnings per share (EPS) of $2.10. Net income for the quarter was $105M. Gross margin was 30.0%. Revenue grew 7.5% year-over-year compared to Q2 2025. Operating income came in at $155M.
In Q1 2026, CARPENTER TECHNOLOGY CORP reported revenue of $734M and earnings per share (EPS) of $2.45. Net income for the quarter was $123M. Gross margin was 29.5%. Revenue grew 2.2% year-over-year compared to Q1 2025. Operating income came in at $153M.
In FY 2025, CARPENTER TECHNOLOGY CORP reported revenue of $2.88B and earnings per share (EPS) of $7.50. Net income for the quarter was $376M. Gross margin was 26.7%. Revenue grew 4.3% year-over-year compared to FY 2024. Operating income came in at $522M.
Over the past 8 quarters, CARPENTER TECHNOLOGY CORP has demonstrated a growth trajectory, with revenue expanding from $2.76B to $2.87B. Investors analyzing CRS stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
CRS Dividend Yield and Income Analysis
CARPENTER TECHNOLOGY CORP (CRS) currently pays a dividend yield of 0.3%. At this yield, a $10,000 investment in CRS stock would generate approximately $$25.00 in annual dividend income. This compares to the Materials sector average dividend yield of 0.5%, meaning CRS yields less than the typical sector peer. The net margin of 14.2% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
CRS Momentum and Technical Analysis Profile
CARPENTER TECHNOLOGY CORP (CRS) has a momentum factor score of 71/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 33/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 13/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
CRS vs Competitors — Materials Sector Ranking and Peer Comparison
Comparing CRS against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full CRS vs S&P 500 (SPY) comparison to assess how CARPENTER TECHNOLOGY CORP stacks up against the broader market across all factor dimensions.
CRS Next Earnings Date
No upcoming earnings date has been announced for CARPENTER TECHNOLOGY CORP (CRS) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy CRS? — Investment Thesis Summary
CARPENTER TECHNOLOGY CORP presents a balanced picture with arguments on both sides. Price momentum is positive at 71/100, suggesting the trend favors buyers.
In summary, CARPENTER TECHNOLOGY CORP (CRS) earns a Hold rating with a composite score of 48.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on CRS stock.
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Institutional Research Dossier
CARPENTER TECHNOLOGY CORP (CRS) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Carpenter Technology (CRS) receives a Hold rating, primarily driven by its rich valuation relative to its sector peers, despite demonstrating strong profitability and recent momentum. While the company exhibits robust operating and net margins, its significantly elevated P/E and EV/EBITDA multiples suggest that much of its future growth is already priced into the stock. Investors should remain cautious, awaiting a more favorable entry point or further evidence of sustained outperformance to justify the current valuation.
The company's strategic focus on specialty alloys and engineered products, serving high-demand sectors like aerospace and defense, positions it favorably for long-term growth. However, the current free cash flow deficit and high debt levels warrant close monitoring. The Hold rating reflects a balanced view, acknowledging Carpenter Technology's strengths while highlighting the valuation concerns and financial risks that temper a more bullish outlook.
Business Strategy & Overview
Carpenter Technology operates as a manufacturer, fabricator, and distributor of specialty metals, serving a diverse range of industries including aerospace, defense, medical, transportation, energy, industrial, and consumer markets. The company's business is segmented into Specialty Alloys Operations and Performance Engineered Products. The Specialty Alloys Operations segment focuses on producing and selling specialty alloys like titanium alloys, powder metals, stainless steels, alloy steels, and tool steels. The Performance Engineered Products segment offers value-added services such as precision machining, heat treating, and other specialized manufacturing processes.
Carpenter Technology's strategic positioning centers on providing high-value, customized solutions to its customers. This involves close collaboration with clients to develop materials and components that meet specific performance requirements. The company invests heavily in research and development to innovate new alloys and manufacturing techniques, maintaining a competitive edge in the specialty metals market. This focus on innovation is crucial for serving industries with stringent material specifications, such as aerospace and medical.
The company's end markets are characterized by high barriers to entry, driven by the need for specialized expertise, advanced manufacturing capabilities, and stringent quality control. Carpenter Technology's long-standing relationships with key customers in these industries provide a degree of stability and recurring revenue. The company also benefits from the increasing demand for lightweight, high-strength materials in sectors like aerospace and automotive, driven by fuel efficiency and performance considerations.
Carpenter Technology's growth strategy involves expanding its product portfolio, enhancing its manufacturing capabilities, and penetrating new markets. The company has made strategic acquisitions to broaden its product offerings and geographic reach. Furthermore, Carpenter Technology is investing in digital technologies to improve operational efficiency, enhance customer service, and optimize its supply chain. This digital transformation is aimed at reducing costs, improving responsiveness, and strengthening its competitive position.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
1.5%
Sector: 1.8%
-17% VS SCTR
Economic Moat Analysis
Carpenter Technology possesses a narrow economic moat, primarily derived from intangible assets and switching costs. The company's decades-long experience in developing and manufacturing specialty alloys has resulted in a valuable portfolio of proprietary knowledge and intellectual property. This expertise is difficult to replicate, providing Carpenter Technology with a competitive advantage in serving industries with demanding material requirements. The company's reputation for quality and reliability further strengthens its moat, as customers are often hesitant to switch to unproven suppliers.
Switching costs also contribute to Carpenter Technology's narrow moat. The company's products are often integrated into critical applications, such as aircraft engines and medical implants. Qualifying a new supplier for these applications can be a lengthy and expensive process, involving extensive testing and validation. This creates a degree of customer stickiness, as customers are reluctant to incur the costs and risks associated with switching suppliers unless there is a significant price or performance advantage.
However, Carpenter Technology's moat is not wide due to the presence of several well-established competitors in the specialty metals market. These competitors possess similar capabilities and expertise, limiting Carpenter Technology's pricing power. Furthermore, the commoditization of certain specialty alloys can erode the company's competitive advantage, as customers may be able to source these materials from multiple suppliers at competitive prices.
The company's ability to maintain and expand its moat will depend on its continued investment in research and development, its ability to innovate new alloys and manufacturing techniques, and its success in building strong relationships with key customers. Failure to innovate or maintain its reputation for quality could weaken its competitive position and erode its moat. The increasing adoption of additive manufacturing (3D printing) in the specialty metals market also poses a potential threat, as it could lower barriers to entry and increase competition.
Financial Health & Profitability
Carpenter Technology's financial health presents a mixed picture. While the company demonstrates strong profitability, its balance sheet leverage and free cash flow generation raise concerns. The company's revenue growth has been modest, with a TTM revenue growth of 1.5%, matching the sector average. However, its gross margin of 28.3% is slightly below the sector average of 30.2%, while its operating margin of 19.7% and net margin of 14.2% significantly outperform the sector averages of 6.0% and 3.0%, respectively. This indicates efficient cost management and a focus on high-value products.
The company's return on equity (ROE) of 20.5% is substantially higher than the sector average of 2.7%, reflecting strong profitability relative to shareholders' equity. However, Carpenter Technology's debt-to-equity ratio of 77.00 is significantly higher than the sector average of 40.00, indicating a higher degree of financial leverage. This increased leverage could amplify the impact of economic downturns or industry-specific challenges on the company's financial performance.
A notable concern is the company's negative free cash flow of -$68.29 million. This suggests that Carpenter Technology is not generating sufficient cash from its operations to cover its capital expenditures and other cash outflows. While the company has a healthy current ratio of 4.25, indicating strong liquidity, the negative free cash flow warrants close monitoring. The company may need to improve its cash flow generation through cost reductions, efficiency improvements, or asset sales.
Analyzing the quarterly financial history reveals a positive trend in revenue and profitability. Revenue has generally increased over the past few years, with Q2 FY2026 revenue reaching $728.00 million. Net income has also shown significant improvement, with Q2 FY2026 net income at $105.30 million. Gross margins and operating margins have also been trending upward, indicating improved operational efficiency. However, the absence of free cash flow data in the quarterly history makes it difficult to assess the company's cash flow performance over time. The company's ability to sustain its profitability and improve its cash flow generation will be crucial for its long-term financial health.
Valuation Assessment
Carpenter Technology's valuation appears stretched based on several key metrics. The company's P/E ratio of 172.6x is significantly higher than the sector average of 26.1x, suggesting that the stock is trading at a substantial premium to its earnings. Similarly, its EV/EBITDA multiple of 29.1x is considerably higher than the sector average of 5.2x, indicating that the company is overvalued relative to its earnings before interest, taxes, depreciation, and amortization.
While Carpenter Technology's strong profitability and growth prospects may justify a premium valuation, the magnitude of the premium appears excessive. The market may be pricing in overly optimistic expectations for future growth or overlooking potential risks. A more reasonable valuation would likely be closer to the sector average, adjusted for the company's superior profitability and growth potential.
The company's negative free cash flow further complicates the valuation assessment. A traditional discounted cash flow (DCF) analysis would be challenging due to the lack of positive free cash flow. Alternative valuation methods, such as relative valuation based on earnings or EBITDA, may be more appropriate. However, even these methods suggest that the stock is currently overvalued.
Given the high valuation multiples and negative free cash flow, investors should exercise caution when considering an investment in Carpenter Technology. A more attractive entry point may emerge if the stock price declines or if the company demonstrates a significant improvement in its cash flow generation. The current valuation appears to reflect a high degree of optimism, leaving limited margin for error.
Risk & Uncertainty
Carpenter Technology faces several specific risks that could negatively impact its business and financial performance. One significant risk is the cyclical nature of its end markets, particularly aerospace and defense. A slowdown in these industries could reduce demand for the company's products and services, leading to lower revenue and profitability. Geopolitical instability and changes in government spending on defense could also affect the company's performance.
Another risk is the company's reliance on a limited number of key customers. The loss of one or more of these customers could have a material adverse effect on the company's revenue and earnings. Carpenter Technology needs to diversify its customer base to reduce its dependence on any single customer. The company also faces competition from other specialty metals manufacturers, both domestic and international. Increased competition could lead to price pressures and reduced market share.
The company's high debt levels also pose a risk. The company's debt-to-equity ratio of 77.00 is significantly higher than the sector average, increasing its financial leverage. This could make it more difficult for the company to weather economic downturns or industry-specific challenges. The company's negative free cash flow is another concern, as it may need to raise additional capital to fund its operations and capital expenditures. This could dilute existing shareholders or increase its debt burden.
Fluctuations in raw material prices, such as nickel, titanium, and chromium, could also affect the company's profitability. Carpenter Technology needs to manage its raw material costs effectively to mitigate the impact of price volatility. Disruptions to the company's supply chain, whether due to natural disasters, geopolitical events, or other factors, could also negatively impact its business. The company needs to have robust supply chain management practices in place to minimize the risk of disruptions.
Bulls Say / Bears Say
The Bull Case
BULL VIEWCarpenter Technology's strategic focus on high-growth sectors like aerospace and defense, coupled with its innovative product portfolio, positions it for sustained revenue and earnings growth.
BULL VIEWThe company's strong operating and net margins, significantly exceeding sector averages, demonstrate its efficient cost management and ability to generate superior profitability.
BULL VIEWCarpenter Technology's increasing investments in digital technologies and strategic acquisitions will enhance its operational efficiency, expand its market reach, and strengthen its competitive position.
The Bear Case
BEAR VIEWCarpenter Technology's extremely high P/E and EV/EBITDA multiples suggest that the stock is significantly overvalued, leaving limited upside potential and substantial downside risk.
BEAR VIEWThe company's negative free cash flow and high debt levels raise concerns about its financial health and ability to fund future growth initiatives without diluting shareholders or increasing leverage.
BEAR VIEWCarpenter Technology's reliance on cyclical end markets and a limited number of key customers exposes it to significant revenue volatility and potential earnings declines during economic downturns.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score CRS and 4,400+ other equities.
CARPENTER TECHNOLOGY CORP exhibits a 452% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
11.6%
Sector: 0.6%
Gross Margin
Pricing power and cost efficiency
28.3%
Sector: 29.8%
Operating Margin
Core business profitability
19.7%
Sector: 6.0%
Net Margin
Bottom-line profitability
14.2%
Sector: 3.0%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.49%
Yield Delta-49%
Income Projection audit
A $10,000 investment would generate approximately $25 annually in dividends at the current trailing rate.
