Timken Company (TKR) AI Stock Analysis

• Market Cap: $5.07B
• Dividend Yield: 1.96%
• Average Volume (3M): 688.86K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 1.06
• Revenue Growth: -3.69%
• EPS Growth: -11.76%
• Country: US
• Employees: 19,000
• Sector: Industrials
• Sector Strength: 90
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 1.40
• Shares Outstanding: 69,963,040
• 10 Day Avg. Volume: 617,624
• 30 Day Avg. Volume: 688,856
• PEG Ratio: -2.11
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.82
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 4.82
• Enterprise Value/Ebitda: 2.07
• 1Y Price Target: $75.07
• Price Target Upside: 8.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 69 Neutral
• Price Target: $80.00 ▲( 15.42% Upside)

Timken Company is in a stable financial position with strong cash flow generation, though it faces challenges in revenue growth and market conditions. The technical indicators suggest short-term momentum but highlight potential for a pullback. Valuation metrics indicate fair pricing, and while the earnings call conveyed some cautious sentiment, the company's commitment to cost management and shareholder value provide a balanced outlook.

Positive Factors

Earnings

TKR will continue to execute on their cost programs, which should provide some earnings tailwind.

Financial Performance

Management is defending EBITDA margin with cost reduction actions to offset inflation, showing efforts to maintain profitability.

Leadership

The return of Rich Kyle as interim President and CEO should provide some confidence that a steady hand is at the wheel.

Negative Factors

Margins

Tariffs pose a risk to margin performance for Timken given their contract-based exposure to OEMs.

Market Expectations

The 2025 EPS guidance is well below expectations, which indicates challenges in meeting market forecasts.

Strategic Direction

The abrupt change in CEO and the return of Rich Kyle is a temporary solution, likely limiting the potential for meaningful strategic news.

Timken Company Business Overview & Revenue Model

Company Description

The Timken Company designs, manufactures, and manages engineered bearings and power transmission products worldwide. It operates in two segments, Mobile Industries and Process Industries. The Mobile Industries segment offers a portfolio of bearings, seals, and lubrication devices and systems, as well as power transmission components, engineered chains, augers, belts, couplings, clutches, brakes, and related products and maintenance services to original equipment manufacturers (OEMs) and end-users of off-highway equipment for the agricultural, construction, mining, outdoor power equipment, and power sports markets; and on-highway vehicles, including passenger cars, light trucks, and medium- and heavy-duty trucks, as well as rail cars and locomotives. It also provides power transmission systems and flight-critical components for civil and military aircraft, which include bearings, rotor-head assemblies, helicopter transmission systems, turbine engine components, gears, and housings. This segment sells its parts through a network of authorized automotive and heavy-truck distributors to individual end-users, equipment owners, operators, and maintenance shops. The Process Industries segment provides industrial bearings and assemblies; power transmission components, such as gears and gearboxes; and linear motion products, couplings, seals, lubricants, chains, belts, and related products and services to OEMs and end-users in various industries. It also offers aftermarket sales and service needs through a network of authorized industrial distributors; and repair and service for bearings and gearboxes, as well as electric motor rewind, repair, and services to end-users. The company offers its products under the Timken, Philadelphia Gear, Drives, Cone Drive, Rollon, Lovejoy, Diamond, BEKA, and Groeneveld brands. The Timken Company was founded in 1899 and is headquartered in North Canton, Ohio.

How the Company Makes Money

Timken generates revenue primarily through the manufacture and sale of its engineered bearings and power transmission products. The company's revenue streams are diversified across several key industries including automotive, aerospace, and industrial sectors, where demand for reliable and high-performance components is high. Timken also engages in aftermarket sales, providing replacement parts and maintenance services, which contribute to a recurring revenue stream. Significant partnerships and acquisitions have also bolstered Timken's market position and expanded its product offerings, enhancing its ability to meet the needs of a global customer base. Timken's financial performance is influenced by factors such as industrial production levels, economic conditions, and technological advancements in manufacturing processes, all of which can impact demand for its products and services.

Timken Company Financial Statement Overview

Summary

Timken Company maintains a stable financial standing with strong cash flow generation and reasonable profitability margins. Despite a slight revenue decline, effective debt management and efficient cash flow conversion support a solid financial foundation.

Income Statement

The company's income statement shows strong profitability with a gross profit margin of 47.89% and an EBIT margin of 12.72% in TTM. However, there is a slight decline in revenue compared to the previous year, leading to a revenue growth rate of -1.09%. The net profit margin stands at 7.53%, indicating stable profitability but with room for improvement.

Balance Sheet

The balance sheet reflects a moderate financial position with a debt-to-equity ratio of 0.72, indicating a balanced leverage. The equity ratio is 47.03%, showing a fair proportion of equity in the total asset structure. Return on equity (ROE) is 11.03%, highlighting reasonable returns on shareholders' investments.

Cash Flow

Cash flow metrics are robust, with a free cash flow to net income ratio of 0.95, indicating efficient conversion of earnings into cash. The operating cash flow to net income ratio is 1.42, underscoring solid cash generation capacity. Free cash flow growth is positive at 5.95%, signaling strong cash flow management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.52B	4.57B	4.77B	4.50B	4.13B	3.51B
	Gross Profit
1.38B	1.44B	1.44B	1.29B	1.10B	1.01B
	EBIT
575.20M	611.10M	657.10M	606.90M	513.10M	454.90M
	EBITDA
744.00M	841.10M	842.50M	822.60M	703.20M	631.00M
	Net Income Common Stockholders
327.50M	352.70M	394.10M	407.40M	369.10M	284.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
376.10M	373.20M	418.90M	331.60M	257.10M	320.30M
	Total Assets
6.57B	6.41B	6.54B	5.77B	5.17B	5.04B
	Total Debt
2.25B	2.18B	2.50B	2.03B	1.54B	1.67B
	Net Debt
1.87B	1.81B	2.08B	1.70B	1.29B	1.35B
	Total Liabilities
3.48B	3.43B	3.84B	3.42B	2.79B	2.82B
	Stockholders Equity
2.92B	2.83B	2.58B	2.27B	2.29B	2.15B
Cash Flow		Free Cash Flow
323.90M	305.70M	357.40M	285.40M	239.00M	456.00M
	Operating Cash Flow
485.00M	475.70M	545.20M	463.80M	387.30M	577.60M
	Investing Cash Flow
-312.60M	-304.60M	-806.50M	-573.30M	-173.80M	-153.50M
	Financing Cash Flow
-210.40M	-194.80M	347.10M	206.80M	-269.30M	-331.10M

Timken Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 69.31
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TKR, the sentiment is Neutral. The current price of 69.31 is above the 20-day moving average (MA) of 68.37, above the 50-day MA of 67.87, and below the 200-day MA of 75.77, indicating a neutral trend. The MACD of 1.70 indicates Negative momentum. The RSI at 52.46 is Neutral, neither overbought nor oversold. The STOCH value of 63.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TKR.

Timken Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSWI	74 Outperform	$5.45B	38.79	16.33%	0.29%	10.41%	34.56%
GTES	74 Outperform	$5.57B	25.79	6.93%	―	-4.01%	-8.86%
MOG.A	72 Outperform	$5.90B	29.01	11.61%	0.60%	4.50%	9.90%
KTOS	71 Outperform	$5.48B	271.81	1.45%	―	7.32%	―
TKR	69 Neutral	$5.07B	15.64	11.85%	1.96%	-3.69%	-11.76%
HXL	65 Neutral	$4.32B	35.42	7.87%	1.16%	5.37%	29.15%
Sector *	64 Neutral	$4.46B	11.94	5.17%	249.36%	4.00%	-12.35%

Timken Company Corporate Events

Timken Company Appoints Richard G. Kyle as Interim CEO

On March 31, 2025, The Timken Company announced the mutual agreement for Tarak B. Mehta to depart as President and CEO, with Richard G. Kyle appointed as interim President and CEO. Kyle, who previously served as CEO from 2014 to 2024, will receive a compensation package including a $1.2 million salary and stock awards. Mehta’s departure was not due to misconduct, and he will receive a $9.25 million settlement.