Timken Company (TKR) AI Stock Analysis

• Market Cap: $6.49B
• Dividend Yield: 1.61%
• Average Volume (3M): 571.89K
• Price to Earnings (P/E): 22.3
• 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: 622,222
• 30 Day Avg. Volume: 571,892
• 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: 1.28
• Enterprise Value/Revenue: 1.82
• Enterprise Value/Gross Profit: 5.96
• Enterprise Value/Ebitda: 10.62
• 1Y Price Target: $97.50
• Price Target Upside: 4.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $106.00 ▲(13.75% Upside)

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

Free cash flow strength

Sustained 24% FCF growth and a 0.71 FCF-to-net-income ratio indicate durable cash-generation capacity. That strengthens the firm's ability to fund capex, pay down debt, return capital, or pursue bolt-on M&A without relying on volatile external financing.

High gross and operating margins

A 30.6% gross margin and healthy EBIT/EBITDA margins reflect efficient manufacturing and pricing power in engineered bearings. These structural margins support long-term reinvestment in R&D, service capabilities, and resilience to moderate demand swings.

Diversified industrial franchise

A century-old, diversified footprint across automotive, aerospace, industrial and aftermarket services creates recurring revenue, deep customer relationships and distribution reach. This mix reduces single-market exposure and supports steady demand across cycles.

Negative Factors

Net profit margin contraction

A notable decline in net margin erodes retained earnings and reduces financial flexibility. If cost pressures or pricing mix persist, sustained margin compression would limit the company's ability to invest, improve ROE, and maintain dividend or buyback capacity over coming quarters.

Tariff-related cost pressure

Ongoing tariff exposure is a structural supply-chain and cost-risk that raises input costs and complicates competitive pricing. Persistent trade barriers can force margin-reducing price increases or costly supply-chain shifts, weighing on profitability until resolved.

Weakness in Industrial Motion segment

A contraction in a key segment tied to solar and services signals demand and mix risk. Prolonged underperformance could drag consolidated revenue growth and margins, requiring strategic repositioning, pricing action, or cost reductions to restore segment-level contribution.

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 revenue growth and efficient cash flow management. While profitability margins have slightly decreased, leverage has improved, indicating prudent financial management. The company is well-positioned within the manufacturing industry, though it should focus on enhancing net profitability to maximize shareholder value.

Income Statement

The income statement shows a strong gross profit margin of 30.58% for TTM, indicating efficient production processes. However, the net profit margin has decreased to 6.54% from 7.71% in the previous year, suggesting increased costs or reduced pricing power. Revenue growth is positive at 6.71% TTM, showing recovery from a slight decline in the previous year. EBIT and EBITDA margins are healthy, though slightly lower than the previous year, indicating stable operational efficiency.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.70 TTM, which has improved from 0.77 the previous year, indicating better leverage management. Return on equity is at 9.93% TTM, down from 12.48% last year, suggesting reduced profitability on equity. The equity ratio remains stable, reflecting a balanced capital structure.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth of 24.02% TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.63, showing adequate cash conversion from earnings. The free cash flow to net income ratio is 0.71, reflecting efficient cash management relative to net income.

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: 93.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 93.19 is above the 20-day moving average (MA) of 91.49, above the 50-day MA of 86.20, and above the 200-day MA of 76.70, indicating a bullish trend. The MACD of 2.30 indicates Positive momentum. The RSI at 63.33 is Neutral, neither overbought nor oversold. The STOCH value of 71.62 is Neutral, 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	$19.04B	19.22	17.96%	2.52%	0.24%	-1.85%
LECO	77 Outperform	$14.60B	28.69	38.11%	1.22%	3.27%	10.89%
RBC	77 Outperform	$15.80B	60.97	8.54%	―	8.27%	19.06%
TKR	76 Outperform	$6.49B	22.27	9.80%	1.61%	-1.01%	-12.13%
KMT	70 Outperform	$2.62B	28.58	7.36%	2.74%	-2.63%	-4.46%
SWK	66 Neutral	$12.18B	27.37	4.92%	4.42%	-1.40%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%