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Timken Company (TKR)
NYSE:TKR
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Timken Company
(NYSE:TKR)
62Neutral
Timken Company (TKR) vs. S&P 500 (SPY)
Market Cap
$5.23B
Dividend Yield1.82%
Average Volume (3M)704.87K
Price to Earnings (P/E)15.0
Beta (1Y)0.96
Revenue Growth-4.11%
EPS Growth-8.74%
CountryUS
Employees19,000
SectorIndustrials
Sector Strength72
IndustryIndustrial Goods
Share Statistics
EPS (TTM)4.98
Shares Outstanding70,001,120
10 Day Avg. Volume577,182
30 Day Avg. Volume704,871
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.14
Price to Cash Flow (P/CF)7.30
P/FCF Ratio9.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$91.14Price Target Upside22.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Timken Company Business Overview & Revenue Model
Company DescriptionThe Timken Co. engages in the engineering, manufacturing and marketing of bearings and power transmission products. It offers gearboxes, belts, chain, lubrication systems, couplings, industrial clutches and brakes. It operates through the Mobile Industries and Process Industries segments. The Mobile Industries segment serves OEM customers that manufacture off-highway equipment for the agricultural, mining and construction markets; on-highway vehicles including passenger cars, light trucks, and medium- and heavy-duty trucks; rail cars and locomotives; outdoor power equipment; and rotorcraft and fixed-wing aircraft. The Process Industries segment handles OEM and end-user customers in industries that place heavy demands on the fixed operating equipment they make or use in heavy and other general industrial sectors. The company was founded by Henry Timken in 1899 and is headquartered in North Canton, OH.
How the Company Makes MoneyTimken Company generates revenue primarily through the sale of bearings and power transmission products across various industries. Its key revenue streams include the original equipment manufacturer (OEM) market, where Timken supplies products directly to manufacturers, and the aftermarket sector, which involves providing replacement parts and maintenance services. Significant partnerships with global industrial and automotive companies, as well as a strong distribution network, contribute to its earnings. Timken's focus on innovation and quality, along with strategic acquisitions to expand its product portfolio and market reach, also play a vital role in its financial performance.
Timken Company Financial Statement Overview
Summary
Timken Company shows solid financial health with a stable balance sheet and income statement performance. Despite minor fluctuations in profitability metrics, the company maintains operational efficiency. However, the decline in free cash flow suggests a need for improved cash flow management.Income Statement
The company's gross profit margin for TTM is 47.50%, indicating efficient cost management. However, the net profit margin decreased to 7.80% from 8.26% in the previous year, showing a slight decline in profitability. Revenue growth has been inconsistent, with a decrease of 4.11% from the previous year. EBIT and EBITDA margins are stable at 13.47% and 17.09% respectively, reflecting good operational performance.75
Positive
Balance Sheet
The debt-to-equity ratio is 0.72, indicating moderate leverage. Return on equity (ROE) is solid at 11.95%, suggesting effective use of equity to generate profits. The equity ratio is 46.56%, which shows a balanced financial structure. The company maintains stability with increasing stockholders' equity over the years.70
Positive
Cash Flow
Free cash flow decreased by 14.51% compared to the previous year, which could impact future investments. The operating cash flow to net income ratio is 1.33, indicating that operating cash flows cover net income comfortably. However, the free cash flow to net income ratio dropped to 0.86, suggesting less efficiency in converting profits into free cash flow.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.57B | 4.77B | 4.50B | 4.13B | 3.51B | Gross Profit |
| 1.44B | 1.44B | 1.29B | 1.10B | 1.01B | EBIT |
| 611.10M | 657.10M | 606.90M | 513.10M | 454.90M | EBITDA |
| 841.10M | 842.50M | 822.60M | 703.20M | 631.00M | Net Income Common Stockholders |
| 352.70M | 394.10M | 407.40M | 369.10M | 284.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 373.20M | 418.90M | 331.60M | 257.10M | 320.30M | Total Assets |
| 6.41B | 6.54B | 5.77B | 5.17B | 5.04B | Total Debt |
| 2.18B | 2.50B | 2.03B | 1.54B | 1.67B | Net Debt |
| 1.81B | 2.08B | 1.70B | 1.29B | 1.35B | Total Liabilities |
| 3.43B | 3.84B | 3.42B | 2.79B | 2.82B | Stockholders Equity |
| 2.83B | 2.58B | 2.27B | 2.29B | 2.15B |
| Cash Flow | Free Cash Flow | |||
| 305.70M | 357.40M | 285.40M | 239.00M | 456.00M | Operating Cash Flow |
| 475.70M | 545.20M | 463.80M | 387.30M | 577.60M | Investing Cash Flow |
| -304.60M | -806.50M | -573.30M | -173.80M | -153.50M | Financing Cash Flow |
| -194.80M | 347.10M | 206.80M | -269.30M | -331.10M |
Timken Company Technical Analysis
Negative
74.69
Price Trends
77.27
Negative
77.52
Negative
79.65
Negative
Market Momentum
-0.89
Positive
38.27
Neutral
24.76
Neutral
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 74.69 is below the 20-day moving average (MA) of 79.51, below the 50-day MA of 77.27, and below the 200-day MA of 79.65, indicating a bearish trend. The MACD of -0.89 indicates Positive momentum. The RSI at 38.27 is Neutral, neither overbought nor oversold. The STOCH value of 24.76 is Neutral, 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 28 risk factors in its most recent earnings report. Timken Company reported the most risks in the “Production” 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $74.79B | 22.85 | 110.24% | 2.17% | -1.30% | 20.26% | |
77 Outperform | $24.81B | 9.14 | 24.30% | 1.16% | -2.99% | 159.26% | |
75 Outperform | $11.08B | 24.25 | 35.36% | 1.46% | -4.23% | -13.42% | |
62 Neutral | $5.23B | 15.00 | 13.04% | 1.82% | -4.11% | -8.74% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% |
* Industrials Sector Average
Performance Comparison
TKR
Timken Company
73.46
-12.16
-14.20%
DOV
Dover
181.75
6.43
3.67%
ITW
Illinois Tool Works
251.30
-5.45
-2.12%
LECO
Lincoln Electric Holdings
190.47
-54.77
-22.33%
Timken Company Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -4.95% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call indicated challenges due to declining revenues and profitability, particularly impacted by European market weakness and unfavorable currency exchanges. However, there were positive contributions from recent acquisitions and resilience in certain regions like the Americas. Management is focused on cost savings and improving operational efficiency to offset these challenges.Highlights
Free Cash Flow Increase
Generated $125 million of free cash flow in the fourth quarter, totaling approximately $300 million for the full year.
Strong Performance in Americas
Americas region showed resilience with a 2% increase in revenue, supported by strong growth in marine, distribution, and rail.
CGI Acquisition Performance
Recent acquisitions, including CGI, contributed positively to revenue growth and were accretive to margins.
Lowlights
Revenue and Profit Decline
Overall revenue declined by 1.6%, and adjusted EPS fell by 15% to $1.16, reflecting weak demand in Europe and Asia Pacific.
European Market Weakness
Revenue in EMEA was down 11% due to industrial slowdowns, with declines in general, heavy industrial, automation, and off-highway sectors.
Unfavorable Currency Impacts
Currency was a headwind, contributing to weaker top-line results and lower adjusted EPS guidance for 2025.
Company Guidance
During Timken's fourth quarter earnings release call for fiscal year 2024, CEO Tarak Mehta and CFO Philip Fracassa provided detailed guidance for 2025. They projected a slight decline in organic sales, with revenue anticipated to be down between 1% and 4%. Adjusted earnings per share (EPS) is expected to be modestly lower than 2024, projected between $5.30 and $5.80. The company also plans to achieve $75 million in cost savings through measures such as supply chain management and reduced discretionary spending. Despite these challenges, Timken aims to maintain an adjusted EBITDA margin of 18.5% and generate at least $400 million in free cash flow for the year. The guidance incorporates potential impacts from China tariffs, but the company has strategies to mitigate these effects. The focus remains on delivering margins and preparing for opportunities in an industrial recovery.Timken Company Corporate Events
Business Operations and StrategyFinancial Disclosures
Timken Company Faces Sales Decline, Plans Cost Reductions
Negative
Feb 5, 2025
Timken reported a decrease in fourth-quarter and full-year 2024 sales, primarily due to lower demand in Europe and unfavorable currency impacts, despite benefits from acquisitions. The company’s net income margin improved in the fourth quarter, and it maintained strong cash flow, while setting a conservative 2025 outlook with anticipated cost reduction measures to support margins and generate higher free cash flow.
Executive/Board Changes
Timken Company Expands Board, Elects New Director
Positive
Jan 21, 2025
On January 21, 2025, the Timken Company expanded its Board of Directors from twelve to thirteen members and elected Kimberly K. Ryan as a director. Ms. Ryan, who is the President and CEO of Hillenbrand, Inc., will also serve on the Audit and Compensation Committees. This move signifies Timken’s commitment to strengthening its leadership team, potentially impacting its strategic direction and governance practices.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.