Analyst Michael Shlisky from DA Davidson has increased the price target for Timken (TKR, Financial) from $66 to $71, maintaining a Neutral rating following the company's first-quarter performance. Despite existing tariffs, the impact on Timken's short-term earnings is expected to be minimal, which is seen as a positive development. The analyst also notes that Timken's strategic adjustments are advancing well. Additionally, Timken's decision to withdraw from the automotive sector is considered commendable, given the difficulties faced by other suppliers in recent years.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for The Timken Co (TKR, Financial) is $77.50 with a high estimate of $102.00 and a low estimate of $65.00. The average target implies an upside of 16.45% from the current price of $66.55. More detailed estimate data can be found on the The Timken Co (TKR) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, The Timken Co's (TKR, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The Timken Co (TKR, Financial) in one year is $78.11, suggesting a upside of 17.37% from the current price of $66.55. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The Timken Co (TKR) Summary page.
TKR Key Business Developments
Release Date: April 30, 2025
- Revenue: $1.14 billion, down 4.2% from last year.
- Organic Revenue Decline: 3.1% decrease from last year.
- Adjusted EBITDA Margin: 18.2%.
- Adjusted Earnings Per Share (EPS): $1.40, down from $1.77 last year.
- Net Income: $78 million or $1.11 per diluted share on a GAAP basis.
- Free Cash Flow: $23 million, higher than last year.
- Engineered Bearings Sales: $761 million, down 5.2% from last year.
- Industrial Motion Sales: $380 million, down around 2% from last year.
- Adjusted EBITDA for Engineered Bearings: $159 million or 20.9% of sales.
- Adjusted EBITDA for Industrial Motion: $67 million or 17.7% of sales.
- Interest Expense: $5 million lower than last year.
- Adjusted Tax Rate: 27%.
- Net Debt to Adjusted EBITDA: 2.2 times.
- Tariff Impact: Estimated net direct impact of $25 million for the year.
- Cost Savings Target: $75 million for 2025.
- Free Cash Flow Outlook: Around $375 million at the midpoint for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Timken Co (TKR, Financial) delivered solid first-quarter results with sales over $1.1 billion, despite challenging operating conditions.
- The company saw growth in Asia, driven by increased demand in the wind energy sector.
- The CGI acquisition continues to perform well, contributing positively to the company's margins.
- The company generated higher free cash flow compared to the prior year, maintaining a solid balance sheet.
- The Timken Co (TKR) is actively passing tariff costs into the market through repricing, aiming to fully offset the cost impact by the end of the year.
Negative Points
- Organic revenue was down around 3% from last year, with lower demand in Europe and the Americas.
- Adjusted EBITDA margins and adjusted earnings per share were below the prior year, primarily due to lower volumes and higher manufacturing costs.
- The company is facing a net direct impact from tariffs, estimated at around $25 million for the year.
- Industrial market conditions are expected to remain challenging for the rest of the year.
- The company experienced unfavorable currency impacts, contributing to a decrease in adjusted EBITDA.
