Timken Company
TKR
$123.16
+1.71%
The Timken Company designs and manages a portfolio of engineered bearings and industrial motion products, providing related services across industries such as aerospace, automotive, and renewable energy. As a global leader in engineered bearings, Timken differentiates itself through its diverse brand portfolio and a dual-segment structure—Engineered Bearings and Industrial Motion—which together serve a wide range of industrial applications. The current investor narrative centers on the company's robust growth trajectory, highlighted by a 54.5% one-year stock price surge, driven by strong demand in renewable energy and automation, while also navigating margin pressures from raw material costs and a recent downgrade by JP Morgan.…
TKR
Timken Company
$123.16
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Investment Opinion: Should I buy TKR Today?
Based on the analysis, TKR is rated a Buy with a thesis that its diversified industrial portfolio and growth in renewable energy and automation will drive earnings, supported by a reasonable valuation and strong cash flow. The consensus analyst rating is 'Buy' with an average target of $147.20, implying 21.8% upside.
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TKR 12-Month Price Forecast
The AI assessment is bullish with medium confidence, as TKR's growth prospects and valuation support upside, but margin pressures and high beta introduce uncertainty. The stock is expected to perform well if margins recover and growth continues. Key developments to watch include Q1 2026 earnings (due in April) and any changes in analyst ratings. If margins improve, the stance would be upgraded to high confidence; if they deteriorate, it would be downgraded to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Timken Company's 12-month outlook, with a consensus price target around $147.75 and implied upside of +20.0% versus the current price.
Average Target
$147.75
0 analysts
Implied Upside
+20.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$130 - $160
Analyst target range
Analyst coverage is robust, with 11 analysts providing ratings, and the consensus recommendation is 'Buy' with a mean rating of 2.17 (where 1 is Strong Buy and 5 is Sell). The average target price is $147.20, implying a 21.8% upside from the current price of $120.82. The target range spans from $129.00 to $160.00, with the low target still 6.8% above the current price, indicating a bullish outlook. The high target of $160.00 suggests potential for 32.4% upside, likely assuming continued growth in renewable energy and automation markets. Recent ratings actions show a mix: Morgan Stanley and KeyBanc have Overweight ratings, while JP Morgan downgraded to Underweight in March 2026, reflecting some uncertainty. The wide spread between low and high targets (31 points) indicates moderate conviction, but the overall consensus is positive, with no Sell ratings among the recent actions.
Bulls vs Bears: TKR Investment Factors
TKR presents a mixed picture: strong long-term growth (54.5% 1-year return) and analyst optimism (21.8% upside) are countered by recent margin compression and a price pullback. The bull case is supported by solid free cash flow, diversified segments, and a reasonable valuation relative to peers. However, the bear case highlights margin erosion, a high beta, and a recent downgrade. Currently, the bull case has slightly stronger evidence due to the robust growth trajectory and analyst consensus, but the key tension lies in whether margin pressures are temporary or structural. If margins recover, the stock could reach analyst targets; if not, the valuation may be too rich.
Bullish
- Strong 1-Year Price Surge: TKR stock has surged 54.48% over the past year, significantly outperforming the S&P 500's 18.56% gain. This reflects strong market confidence in the company's growth prospects, particularly in renewable energy and automation sectors.
- Analyst Consensus Buy with 21.8% Upside: The average analyst target price is $147.20, implying a 21.8% upside from the current price of $120.82. With a consensus rating of 'Buy' (mean 2.17 on a 1-5 scale), analysts see substantial room for appreciation.
- Solid Free Cash Flow Generation: Trailing twelve-month free cash flow stands at $406.1 million, demonstrating robust cash generation. This supports dividend payments and strategic investments, with a current dividend yield of 1.67% and a 415-consecutive-quarter payment streak.
- Attractive Valuation vs. Industry: TKR's trailing PE of 20.37x is below the industry average of 22x, a 7.4% discount. The forward PE of 16.61x suggests expected earnings growth, making the stock reasonably priced relative to peers.
Bearish
- Margin Compression in Q4 2025: Gross margin fell to 21.89% in Q4 2025 from 30.16% in Q3, a significant drop. Net margin also declined to 5.6% from 6.7%, indicating cost pressures that could erode profitability if sustained.
- Recent Price Pullback from Highs: The stock is trading at $120.82, 17.4% below its 52-week high of $146.37. The 1-month price change is -8.62%, and the 3-month change is -5.59%, suggesting momentum has stalled and profit-taking may be occurring.
- JP Morgan Downgrade to Underweight: In March 2026, JP Morgan downgraded TKR to Underweight, reflecting concerns about near-term growth and margin pressures. This negative sentiment could weigh on the stock despite the overall 'Buy' consensus.
- High Beta and Market Sensitivity: With a beta of 1.227, TKR is more volatile than the market, amplifying downside risk during economic downturns. The recent 1-month relative strength of -14.09% vs. the S&P 500 highlights this sensitivity.
TKR Technical Analysis
Timken's stock is in a strong uptrend over the past year, with a 1-year price change of +54.48%, significantly outperforming the S&P 500's +18.56%. However, the current price of $120.82 is only 82.6% of the 52-week high of $146.37, indicating a pullback from recent highs. The stock is trading at 82.6% of its 52-week range, suggesting it has room to recover but remains below peak momentum levels. This positioning near the upper end of the range reflects a market that has rewarded the stock's growth, yet the recent correction signals potential consolidation or profit-taking after a strong run.
Beta
1.21
1.21x market volatility
Max Drawdown
-18.1%
Largest decline past year
52-Week Range
$71-$146
Price range past year
Annual Return
+59.1%
Cumulative gain past year
| Period | TKR Return | S&P 500 |
|---|---|---|
| 1m | -6.2% | +0.1% |
| 3m | -6.6% | +4.4% |
| 6m | +23.6% | +14.6% |
| 1y | +59.1% | +18.6% |
| ytd | +42.7% | +12.9% |
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TKR Fundamental Analysis
Timken's revenue has shown resilience, with the latest quarter (Q4 2025) reporting $1.111 billion, a 3.48% year-over-year increase. This growth is modest but consistent, with quarterly revenues ranging from $1.111 billion to $1.173 billion over the past year, indicating stability. The Engineered Bearings segment, which generates $1.4749 billion in revenue, remains the primary driver, while Industrial Motion contributes $776.4 million, reflecting a diversified portfolio. The company's net income of $62.3 million in Q4 2025 translates to a net margin of 5.6%, down from 6.7% in Q3 2025, showing slight margin compression. Gross margin for the quarter was 21.89%, lower than the 30.16% in Q3, indicating cost pressures. However, the trailing twelve-month free cash flow of $406.1 million demonstrates solid cash generation, and the debt-to-equity ratio of 0.68 is manageable, providing financial flexibility. The current ratio of 2.82 indicates strong liquidity, and the ROE of 9.06% reflects efficient use of equity.
Quarterly Revenue
$1.1B
2025-12
Revenue YoY Growth
+3.5%
YoY Comparison
Gross Margin
21.9%
Latest Quarter
Free Cash Flow
$406100000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TKR Overvalued?
Given Timken's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 20.37x, while the forward PE is 16.61x, indicating the market expects earnings growth. This gap of 3.76x suggests a positive growth outlook, with analysts estimating EPS of $8.48 for the next fiscal year. Compared to the industry average PE of 22x (from valuation data), Timken trades at a 7.4% discount, which is attractive given its growth prospects. Historically, Timken's PE has ranged from 9.3x to 23.5x over the past five years, with the current 20.37x near the higher end, reflecting improved market sentiment. The PS ratio of 1.28x is below the historical average of 4.5x, suggesting the stock is undervalued on a sales basis, but this is influenced by the recent price surge. Overall, the valuation appears reasonable, with a PEG ratio of -1.15 (negative due to expected earnings decline), but the forward PE indicates growth is priced in.
PE
20.4x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 9x~24x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financially, TKR's debt-to-equity ratio of 0.68 is manageable, but the company's net margin declined to 5.6% in Q4 2025 from 6.7% in Q3, indicating cost pressures. Gross margin dropped sharply to 21.89% from 30.16%, which could signal rising raw material costs or pricing pressures. The company's free cash flow of $406.1 million is solid, but if margins continue to compress, cash generation could weaken, impacting dividend sustainability (payout ratio 34%). Additionally, the negative PEG ratio (-1.15) suggests that earnings are expected to decline, which could lead to a de-rating if not reversed.