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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on TKR

The Timken Company's recent performance has been driven by its transformation into a diversified, higher-margin industrial business with reduced cyclical risk. The company's pivot from automotive OEMs to the Industrial Motion segment and aftermarket sales has stabilized earnings and improved profitability. Q3 2025 earnings beat estimates with $1.37 per share, compared to $1.25 per share expected. Sales rose 2.7% year-over-year to $1.16 billion. The Industrial Motion segment offers significant growth potential driven by automation and on-shoring trends.

1.c. Company Highlights

2. Timken's Q3 Earnings: A Strong Performance

Timken reported a revenue of $1.16 billion for the third quarter, up 2.7% from the previous year, with adjusted EBITDA margins increasing to 17.4%, a 50 basis point improvement. Adjusted earnings per share (EPS) came in at $1.37, beating analyst estimates of $1.25, representing an 11% increase from the previous year. The company's operating cash flow was $201 million, and free cash flow was $164 million, up significantly from the previous year. The strong financial performance was driven by higher pricing across both segments and modest volume growth in Engineered Bearings.

Publication Date: Nov -02

📋 Highlights
  • Revenue Growth:: Q3 revenue reached $1.16 billion, a 2.7% increase year-over-year.
  • Adjusted EBITDA Margin Expansion:: Margins improved to 17.4%, a 50 basis point increase from 16.9% in the prior year.
  • Free Cash Flow Strength:: Generated $164 million in free cash flow, up significantly from the previous year.
  • EBITDA Growth:: Adjusted EBITDA rose to $202 million (17.4% of sales) compared to $190 million (16.9%) in the prior year.
  • Pricing Strategy Impact:: Achieved above 1.5% pricing growth year-to-date, offsetting tariff headwinds and driving margin expansion.

Segment Performance

The Engineered Bearings segment saw sales of $766 million, up 3.4% from the previous year, while the Industrial Motion segment reported sales of $391 million, up 1.3% from the previous year. The company's pricing strategy has been successful, with above 1.5% pricing for the full year, which will continue to offset tariffs. As Lucian Boldea mentioned, "We're trying to sense the data to predict an upturn or downturn in the distribution segment. Inventories are not elevated, and sales in and sales out are reasonably matched."

Outlook and Guidance

The company reaffirmed its earnings guidance range of $5.25, with the midpoint of the range now being the better-than-expected third quarter results offsetting an incremental $0.05 per share headwind from tariffs and a lower outlook for the fourth quarter. Analysts estimate next year's revenue growth at 3.4%. The company's valuation metrics, such as a P/E Ratio of 18.13 and an EV/EBITDA of 10.92, indicate a relatively stable valuation. The dividend yield of 1.76% and free cash flow yield of 7.14% are also attractive.

Strategic Focus

The company is focused on executing its 80/20 approach, structurally improving margins, and growing faster in the most profitable verticals. As Lucian Boldea stated, "We want every business in the portfolio to contribute to the 20% EBITDA margin target." The company plans to host an Investor Day in Q2 to share more clarity on its strategic vision and priorities.

3. NewsRoom

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Timken Earns Sixth Straight America's Most Responsible Companies Recognition

Dec -03

Source: prnewswire.com

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Boston Partners Grows Position in Timken Company (The) $TKR

Dec -01

Source: defenseworld.net

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Timken to Participate in Upcoming Investor Conferences

Nov -18

Source: prnewswire.com

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Timken Company (The) (NYSE:TKR) Receives $82.20 Consensus PT from Analysts

Nov -18

Source: defenseworld.net

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Timken Declares Quarterly Dividend of 35 Cents Per Share

Nov -14

Source: prnewswire.com

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Arnold Van Den Berg Exits Atkore Inc, Impacting Portfolio by -0.85%

Nov -14

Source: gurufocus.com

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The Timken Company (TKR) Presents at Baird 55th Annual Global Industrial Conference Transcript

Nov -12

Source: seekingalpha.com

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The Timken Company: Transformed Business With A Strong Moat And Visible Growth

Oct -30

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.83%)

6. Segments

Engineered Bearings

Expected Growth: 1.8%

The 1.8% growth of Engineered Bearings from The Timken Company is driven by increasing demand from wind energy and industrial distribution customers, as well as growth in the aerospace and defense markets. Additionally, the company's focus on innovation and product diversification, such as the introduction of new bearing designs and materials, contributes to its steady growth.

Industrial Motion

Expected Growth: 1.9%

The 1.9% growth in Industrial Motion from The Timken Company is driven by increasing demand for automation and robotics in manufacturing, rising adoption of renewable energy sources, and growing need for energy-efficient solutions. Additionally, the segment benefits from the company's diversified customer base and its ability to provide customized solutions to original equipment manufacturers.

7. Detailed Products

Bearings

The Timken Company offers a wide range of bearings, including tapered, spherical, cylindrical, and needle bearings, designed to reduce friction and wear in various industrial applications.

Gearboxes

Timken's gearboxes are designed to provide high torque and speed ratios, offering efficient power transmission solutions for industrial applications.

Belts and Chain Drives

Timken's belts and chain drives provide reliable power transmission solutions for industrial applications, offering high flexibility and durability.

Seals and Lubrication Systems

Timken's seals and lubrication systems are designed to protect bearings and other components from contamination and wear, ensuring optimal performance and extended lifespan.

Couplings

Timken's couplings provide flexible and reliable connections between shafts, allowing for misalignment and vibration absorption in industrial applications.

Automotive Components

Timken's automotive components, including bearings, seals, and lubrication systems, are designed to improve fuel efficiency, reduce emissions, and enhance vehicle performance.

8. The Timken Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Timken Company is medium due to the availability of alternative products from competitors, but the company's strong brand reputation and quality products mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for The Timken Company due to the company's strong relationships with its customers and its ability to provide customized solutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for The Timken Company due to the company's dependence on a few key suppliers, but the company's strong relationships with its suppliers mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low for The Timken Company due to the high barriers to entry in the industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high for The Timken Company due to the competitive nature of the industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.33%
Debt Cost 3.95%
Equity Weight 51.67%
Equity Cost 11.46%
WACC 7.83%
Leverage 93.54%

11. Quality Control: The Timken Company passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Snap-on

A-Score: 6.8/10

Value: 3.9

Growth: 6.0

Quality: 8.1

Yield: 6.0

Momentum: 7.5

Volatility: 9.0

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Lincoln Electric

A-Score: 5.4/10

Value: 2.4

Growth: 6.4

Quality: 6.3

Yield: 2.0

Momentum: 7.5

Volatility: 7.7

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RBC Bearings

A-Score: 5.3/10

Value: 0.8

Growth: 7.4

Quality: 6.8

Yield: 0.0

Momentum: 8.5

Volatility: 8.3

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Toro

A-Score: 5.1/10

Value: 4.1

Growth: 6.1

Quality: 5.8

Yield: 3.0

Momentum: 3.5

Volatility: 8.0

1-Year Total Return ->

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Timken

A-Score: 4.9/10

Value: 5.4

Growth: 5.1

Quality: 4.6

Yield: 4.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stanley Black & Decker

A-Score: 4.2/10

Value: 4.9

Growth: 3.1

Quality: 3.9

Yield: 7.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

83.21$

Current Price

83.21$

Potential

0.00%

Expected Cash-Flows