Timken Company (TKR) AI Stock Analysis

• Market Cap: $6.31B
• Dividend Yield: 1.61%
• Average Volume (3M): 612.59K
• Price to Earnings (P/E): 21.6
• Beta (1Y): 1.08
• Revenue Growth: -1.01%
• EPS Growth: -12.13%
• Country: US
• Employees: 19,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 1.37
• Shares Outstanding: 69,655,590
• 10 Day Avg. Volume: 531,950
• 30 Day Avg. Volume: 612,590
• PEG Ratio: -1.57
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 1.10
• P/FCF Ratio: 16.39
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 1.58
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 9.23
• 1Y Price Target: $89.80
• Price Target Upside: -0.88% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $90.00 ▼(-0.66% Downside)

Timken Company scores well due to strong financial performance and positive technical indicators. The earnings call provided a balanced view with both achievements and challenges, contributing to a stable outlook. Valuation is fair, supporting the overall positive assessment.

Positive Factors

Revenue Growth

The increase in revenue indicates strong demand for Timken's products and services, suggesting a robust market position and potential for sustained growth.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, allowing Timken to invest in growth opportunities and manage debt effectively.

Market Growth in EMEA and Renewables

Growth in the EMEA region and renewables indicates successful market expansion and diversification, which can drive long-term revenue stability.

Negative Factors

Tariff Impacts

Tariff-related costs can erode profitability and create uncertainty, potentially impacting Timken's competitive positioning and financial performance.

Industrial Motion Segment Challenges

Declining sales in the Industrial Motion segment highlight challenges in demand, which could affect overall revenue and margin performance.

Fourth Quarter Outlook

The anticipated sales decline in the fourth quarter suggests potential headwinds from trade uncertainties, impacting short-term growth prospects.

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 sale of its bearings and mechanical power transmission products to a diverse customer base across various industries, including automotive, aerospace, and manufacturing. The company's revenue model is built on both direct sales and distribution partnerships, allowing it to reach a broad market. Key revenue streams include the sale of standard and custom-engineered bearings, as well as aftermarket services and solutions. Additionally, Timken benefits from long-term relationships with major clients and industries, which often leads to repeat business and ongoing contracts. The company also invests in research and development to innovate and enhance its product offerings, further solidifying its market position and driving future growth.

Timken Company Financial Statement Overview

Summary

Timken Company demonstrates solid financial health with strong cash flow and operational efficiency. Despite revenue volatility and declining gross profit margins, the balance sheet remains stable, and cash flow metrics are strong, supporting a positive outlook.

Income Statement

The income statement shows a mixed performance. The TTM gross profit margin is significantly lower than previous years, indicating potential cost pressures. However, the EBIT and EBITDA margins remain strong, suggesting operational efficiency. Revenue growth has been volatile, with a notable decline in the most recent annual report, but a strong rebound in the TTM period.

Balance Sheet

The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio that has improved in the TTM period. Return on equity has decreased, indicating a decline in profitability relative to equity. The equity ratio remains healthy, suggesting a strong capital structure.

Cash Flow

Cash flow analysis reveals a positive trend with strong free cash flow growth in the TTM period. The operating cash flow to net income ratio is stable, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is robust, highlighting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.54B	4.57B	4.77B	4.50B	4.13B	3.51B
Gross Profit	1.39B	1.45B	1.52B	1.34B	1.16B	1.02B
EBITDA	780.10M	834.30M	915.10M	838.20M	713.80M	661.70M
Net Income	297.30M	352.70M	394.10M	407.40M	369.10M	284.50M
Balance Sheet
Total Assets	6.80B	6.41B	6.54B	5.77B	5.17B	5.04B
Cash, Cash Equivalents and Short-Term Investments	449.10M	389.10M	450.90M	379.90M	257.10M	357.90M
Total Debt	2.24B	2.18B	2.50B	2.05B	1.57B	1.69B
Total Liabilities	3.51B	3.43B	3.84B	3.42B	2.79B	2.82B
Stockholders Equity	3.13B	2.83B	2.58B	2.27B	2.29B	2.15B
Cash Flow
Free Cash Flow	390.40M	305.70M	357.40M	285.40M	239.00M	456.00M
Operating Cash Flow	549.60M	475.70M	545.20M	463.80M	387.30M	577.60M
Investing Cash Flow	-161.70M	-304.60M	-806.50M	-573.30M	-173.80M	-153.50M
Financing Cash Flow	-347.40M	-194.80M	347.10M	206.80M	-269.30M	-331.10M

Timken Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 90.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TKR, the sentiment is Positive. The current price of 90.6 is above the 20-day moving average (MA) of 86.81, above the 50-day MA of 81.94, and above the 200-day MA of 74.80, indicating a bullish trend. The MACD of 1.97 indicates Negative momentum. The RSI at 64.42 is Neutral, neither overbought nor oversold. The STOCH value of 83.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TKR.

Timken Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNA	78 Outperform	$18.79B	18.98	17.96%	2.52%	0.24%	-1.85%
LECO	77 Outperform	$13.81B	27.04	38.11%	1.22%	3.27%	10.89%
RBC	77 Outperform	$15.33B	59.18	8.54%	―	8.27%	19.06%
TKR	76 Outperform	$6.31B	21.57	9.80%	1.61%	-1.01%	-12.13%
KMT	72 Outperform	$2.28B	25.23	7.36%	2.74%	-2.63%	-4.46%
SWK	67 Neutral	$12.62B	28.49	4.92%	4.42%	-1.40%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%