A cutting tool for undercutting a bore in a component includes a shaft portion and at least one tangentially and axially cutting portion. The shaft portion extends in an axial direction relative to the component and has a maximum shaft radius. The cutting portion projects radially with respect to the shaft portion further than the maximum shaft radius. Each cutting portion includes a tangentially arranged lateral cutting edge configured to form a tangentially extending groove in the component. At least one cutting portion has a front cutting edge arranged axially at a front end thereof and configured to form an axially extending groove in the component.