Carpenter Technology: F4Q Preview: Negative Catalyst Watch into Print as Risk/Reward Skews Negative Following Recent Outperformance; Reit. ‘Core‘ OW Holding

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Carpenter Technology: F4Q Preview: Negative Catalyst Watch into Print as Risk/Reward Skews Negative Following Recent Outperformance; Reit. ‘Core‘ OW Holding

Bennett Moore AC North America Equity Research

(1-212) 622-0188 14 July 2026 J P M O R G A N

bennett.moore@jpmchase.com

• F4Q guidance & outlook: Last quarter (link), management guided F4Q SAO EBIT to

$224-228M (JPMe $227M) and PEP EBIT steady. Taken together with ~$25M of

corporate costs, consolidated EBIT was guided between $205-210M (JPMe $209M). For

SAO, we anticipate sequentially improved shipments/pricing on seasonality (and

incremental structural orders) and a more normalized IGT mix given F3Q IGT-levered

energy sales rose 32% Q/Q (+44% Y/Y). For PEP, we feel it may be early for the recent

uptick in medical bookings to hit results, although this could benefit F1Q’s guide. F4Q

typically sees a WC unwind, which should help fund steady buybacks and elevated capex

over the next few quarters, where we anticipate peak FY27 capex guided to at least

$350M.

• Establishing new $705 Dec-27 PT: Initial F1Q EBIT guidance likely implies steady-to-

higher Q/Q (JPMe $207M) given typical seasonality, and while we anticipate F4Q SAO

ASP growth remains capped due to mix shift (assuming shipments continue to be

reported), we’ll look for management commentary confirming ongoing “transactional”

price momentum, to what extent structural ordering activity has accelerated, and timing

around re-acceleration in medical shipments. Investors are also keen to better understand

future opportunities within space (~1% revenue share currently) and whether defense-

related activity has picked up. On our new FY28 estimates, we establish a $705 Dec-27

PT on $1.3B implied CY28 EBITDA, now using 27x EV/EBITDA. Shares currently