KeyBanc Upgrades Carpenter Technology to Overweight Amid Aerospace Demand Surge and Pricing Power

KeyBanc Capital Markets upgraded Carpenter Technology Corporation (CRS) to Overweight, citing growing aerospace demand and enhanced pricing flexibility. The move reflects stronger near-term profitability expectations for the industrial materials supplier.

KeyBanc Capital Markets has upgraded Carpenter Technology Corporation (CRS) to Overweight, signaling increased confidence in the company’s near-term performance. The brokerage cited a sustained recovery in aerospace manufacturing and improved pricing power as primary catalysts, driven by constrained supply and rising demand for high-performance alloys. Carpenter Technology, a leading producer of specialty metals and alloys, is seeing elevated demand from defense and commercial aerospace clients. The company reported a 12% year-over-year increase in aerospace-related revenue during the third quarter of 2025, with backlog levels reaching record highs. This growth is underpinned by long-term contracts with major OEMs and increased investment in next-generation aircraft programs. The upgrade reflects an improved outlook on margins, with KeyBanc projecting a 500 basis point improvement in operating margins by the end of 2026, fueled by strategic price increases and cost optimization. CRS’s ability to pass through rising raw material costs—particularly for nickel and cobalt—has strengthened its pricing discipline, a key differentiator in the industrial materials sector. The upgrade is expected to influence investor positioning in CRS stock, which has seen a 7% rally in the past two weeks. Market participants are also monitoring the broader aerospace supply chain, including suppliers of titanium and superalloys, as defense budgets and air travel recovery continue to expand.