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Timken (TKR)
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Timken Company (TKR) AI Stock Analysis

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TKR

Timken Company

(NYSE:TKR)

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Neutral 69 (OpenAI - 4o)
Rating:69Neutral
Price Target:
$81.00
▲(9.16% Upside)
Timken's overall stock score reflects a solid financial foundation with strong cash flow and profitability, but is tempered by current bearish technical indicators and mixed earnings call sentiment. The valuation is reasonable, but trade uncertainties and sales challenges weigh on the near-term outlook.
Positive Factors
Cash Flow Generation
Strong free cash flow generation indicates efficient operations and financial flexibility, allowing for reinvestment and shareholder returns.
Automation Sector Focus
Investment in automation positions Timken for growth in high-demand sectors, enhancing its competitive edge and market expansion.
Dividend Growth
Dividend growth and share repurchases demonstrate strong capital management and commitment to returning value to shareholders.
Negative Factors
Revenue Growth Challenges
Negative revenue growth indicates challenges in expanding market share or product demand, potentially impacting long-term profitability.
Sales Decline
Declining sales reflect potential demand issues or market saturation, which could hinder future revenue and earnings growth.
Challenging Operating Environment
Trade uncertainties can lead to cost volatility and demand fluctuations, posing risks to operational stability and financial performance.

Timken Company (TKR) vs. SPDR S&P 500 ETF (SPY)

Timken Company Business Overview & Revenue Model

Company DescriptionThe 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 MoneyTimken Company generates revenue primarily through the sale of its engineered bearings and related products. The company's revenue model is built on multiple key streams, including the sale of bearings for various applications, power transmission products, and aftermarket services. Timken's extensive distribution network and strong brand reputation allow it to secure contracts with large industrial clients, contributing significantly to its earnings. Additionally, the company invests in research and development to innovate and improve existing products, which helps maintain its competitive edge. Strategic partnerships with other manufacturers and suppliers also play a critical role in expanding its market reach and enhancing product offerings, further driving revenue growth.

Timken Company Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The call highlighted some positive developments such as an increase in backlog, dividend growth, and a positive outlook for 2026 due to automation sector focus. However, these were balanced by challenges like sales decline, lower margins, and a cautious outlook for the rest of 2025 due to trade uncertainties. The sentiment is mixed with a cautious tone.
Q2-2025 Updates
Positive Updates
Backlog Increase
The total backlog at the end of June increased by mid-single digits compared to the first quarter, indicating a positive trend for 2026.
Dividend Increase
Timken raised its quarterly dividend by 3% and purchased 340,000 shares of stock, continuing to create shareholder value.
Automation Sector Focus
Timken is investing in the automation sector, focusing on high-growth applications such as industrial robotics, factory automation, and medical robotics.
Positive Outlook for 2026
Optimism for 2026 due to backlog inflection and industrial market expansion as trade stabilizes.
Negative Updates
Sales Decline
Total sales in the quarter were down less than 1% from last year, with organic sales down 2.5% due to lower demand.
Lower Margin and EPS
Adjusted EBITDA margins were 17.7% and adjusted EPS was $1.42, both below prior year levels due to lower volumes, higher tariff costs, and unfavorable currency.
Challenging Operating Environment
The company expects the operating environment to remain challenging due to trade uncertainty impacting costs and demand.
Lower Volume Guidance
The company reduced the high end of its full-year earnings outlook due to a more cautious view of the second half, primarily driven by trade volatility.
Company Guidance
During the second quarter of 2025, Timken experienced a slight decline in total sales, down less than 1% from the previous year, with organic sales dropping by 2.5%. Adjusted EBITDA margins were reported at 17.7%, and adjusted EPS was $1.42, both lower than the prior year due to reduced volumes, increased tariff costs, and unfavorable currency impacts. The company generated $78 million in free cash flow, raised the quarterly dividend by 3%, and repurchased 340,000 shares. Looking forward, Timken expects a challenging operating environment for the rest of 2025, citing trade uncertainties as a key factor. The company plans to mitigate the impact of tariffs through repricing strategies, with pricing having already increased sequentially from the first quarter. Timken remains optimistic about 2026, highlighting an increased backlog as a positive indicator, and anticipates benefiting from market expansion, pricing carryover, and cost savings initiatives.

Timken Company Financial Statement Overview

Summary
Timken Company maintains a solid financial position with strong profitability margins and efficient cash flow generation. Despite challenges in revenue growth, the company shows resilience with strong cost management and a balanced financial structure.
Income Statement
78
Positive
The income statement shows a steady performance with a stable gross profit margin of approximately 14.8% in TTM (Trailing-Twelve-Months). Net profit margin for TTM is 7.3%, slightly below the previous year's 7.7%, indicating solid profitability. Revenue growth has been negative in recent periods, with a -5.5% drop from 2023 to TTM, suggesting challenges in growing top-line sales. EBIT and EBITDA margins remain healthy at 12.2% and 13.2% respectively, reflecting efficient cost management.
Balance Sheet
75
Positive
The balance sheet presents a solid financial structure with a debt-to-equity ratio of 0.70 in TTM, indicating modest leverage, although slightly higher than the industry average. The equity ratio stands at 48.0%, suggesting a good balance of equity financing. Return on Equity (ROE) is 10.1%, reflecting decent returns for shareholders, though a decline from previous years, highlighting a need to enhance profitability.
Cash Flow
82
Very Positive
Cash flow analysis reveals strong free cash flow generation, with a 3.0% growth in free cash flow from 2024 to TTM. The operating cash flow to net income ratio is 1.43, indicating strong cash conversion. The free cash flow to net income ratio is 0.95, showcasing efficient free cash flow generation, which supports financial flexibility and potential for reinvestment.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.51B4.57B4.77B4.50B4.13B3.51B
Gross Profit1.37B1.44B1.52B1.29B1.10B1.01B
EBITDA721.00M841.10M842.50M822.60M703.20M631.00M
Net Income309.80M352.70M394.10M407.40M369.10M284.50M
Balance Sheet
Total Assets6.81B6.41B6.54B5.77B5.17B5.04B
Cash, Cash Equivalents and Short-Term Investments419.30M389.10M450.50M370.80M314.00M357.90M
Total Debt2.28B2.18B2.50B2.05B1.57B1.67B
Total Liabilities3.54B3.43B3.84B3.42B2.79B2.82B
Stockholders Equity3.27B2.83B2.58B2.27B2.29B2.15B
Cash Flow
Free Cash Flow314.80M305.70M357.40M285.40M239.00M456.00M
Operating Cash Flow471.70M475.70M545.20M463.80M387.30M577.60M
Investing Cash Flow-306.80M-304.60M-806.50M-573.30M-173.80M-153.50M
Financing Cash Flow-227.70M-194.80M347.10M206.80M-269.30M-331.10M

Timken Company Technical Analysis

Technical Analysis Sentiment
Negative
Last Price74.20
Price Trends
50DMA
77.13
Negative
100DMA
74.50
Negative
200DMA
73.51
Positive
Market Momentum
MACD
-0.22
Positive
RSI
40.48
Neutral
STOCH
6.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TKR, the sentiment is Negative. The current price of 74.2 is below the 20-day moving average (MA) of 77.05, below the 50-day MA of 77.13, and above the 200-day MA of 73.51, indicating a neutral trend. The MACD of -0.22 indicates Positive momentum. The RSI at 40.48 is Neutral, neither overbought nor oversold. The STOCH value of 6.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TKR.

Timken Company Risk Analysis

Timken Company disclosed 29 risk factors in its most recent earnings report. Timken Company reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Timken Company Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
17.71B18.0917.50%2.54%-0.76%-2.62%
78
Outperform
12.89B26.2836.45%1.25%0.24%0.05%
74
Outperform
11.95B47.728.13%5.48%16.88%
69
Neutral
$5.27B17.2110.52%1.86%-2.01%-9.95%
64
Neutral
11.62B23.814.45%4.48%-2.71%
63
Neutral
1.59B17.457.25%3.84%-3.91%-12.49%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TKR
Timken Company
74.20
-9.24
-11.07%
KMT
Kennametal
20.84
-4.66
-18.27%
LECO
Lincoln Electric Holdings
236.31
45.84
24.07%
RBC
RBC Bearings
379.44
79.57
26.53%
SNA
Snap-on
336.98
55.74
19.82%
SWK
Stanley Black & Decker
73.45
-31.64
-30.11%

Timken Company Corporate Events

Executive/Board Changes
Timken Company Appoints New CEO Lucian Boldea
Neutral
Aug 27, 2025

On August 22, 2025, The Timken Company announced that Lucian Boldea will become its new President and CEO effective September 1, 2025, succeeding Richard G. Kyle. Boldea, with extensive leadership experience at Honeywell and Eastman Chemical Company, will guide Timken through a transition period ending November 14, 2025, with Kyle continuing as an advisor. Boldea’s compensation package includes a base salary, short-term and long-term incentives, and a severance agreement, reflecting the company’s commitment to securing experienced leadership to enhance its market position.

Executive/Board Changes
Timken Appoints New CFO Michael A. Discenza
Neutral
Aug 15, 2025

On August 14, 2025, Timken Company announced the appointment of Michael A. Discenza as Vice President and Chief Financial Officer, succeeding Philip D. Fracassa. Discenza, with over 25 years of experience at Timken, will receive a comprehensive compensation package, including a base salary, short-term incentives, and long-term equity incentives, reflecting the company’s commitment to leadership stability and strategic growth.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 26, 2025