Timken Company (TKR – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Stephen Volkmann from Jefferies downgraded the rating on the stock to a Hold and gave it a $70.00 price target.
Stephen Volkmann has given his Hold rating due to a combination of factors affecting Timken Company. The analyst cites potential challenges such as lower volumes and margin compression, which are expected to arise from weakening short-cycle sentiment and possible tariff headwinds. These factors contribute to increased downside risks for the second half of the year. Additionally, the company is undergoing a CEO transition, with Rich Kyle stepping in as interim President and CEO after the departure of Tarak Mehta.
Volkmann also notes that the market environment has become more challenging, with deteriorating sentiment and negative PMIs, which could lead to overly optimistic consensus estimates. The impact of tariffs on margins is a concern, especially given Timken’s contract-based exposure to OEMs, where cost increases would need to be negotiated. Despite these challenges, the company is expected to continue executing its cost programs, providing some support to earnings. However, the overall outlook has led to a reduction in earnings estimates and a lowered price target.
Volkmann covers the Industrials sector, focusing on stocks such as Agco, Eaton, and Deere. According to TipRanks, Volkmann has an average return of 17.7% and a 63.03% success rate on recommended stocks.