Timken Co Dossier - Source-backed chat

Timken Co

TKRNYSE

SectorIndustrials

IndustryTools & Accessories

Beta (adjusted)1.15

Intrinsic Value $86.34median of 6 methods · middle span $75-$114based on filings through 30 Jun 2026

Market Price $116.75Price as of 30 Sep 2026

OvervaluedIntrinsic value is 26% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $8.1B

Enterprise Value $9.7B

Shares Outstanding 70.1M diluted

Moat Rating None

Next Earnings Date28 Oct 2026

Last ex-dividend18 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Timken entered the second half of 2026 with improving demand, positive pricing, 4.4% second-quarter organic sales growth and a 190-basis-point year-over-year increase in adjusted EBITDA margin to 19.6%. Management consequently raised full-year adjusted EPS guidance to USD 6.05-6.35 and expects total revenue growth of about 5.5% at the midpoint. The longer-term case depends on executing Elevate to Outperform: optimizing the portfolio, concentrating resources in strategic verticals and leveraging the multinational footprint to reach a 21%-23% adjusted EBITDA margin, approximately USD 8.50 of adjusted EPS and about USD 1.3 billion of cumulative free cash flow by 2028. Industrial Motion's second-quarter margin expansion and the Bijur Delimon acquisition support that opportunity, while the belts divestiture is intended to improve portfolio quality. Offsetting factors include a large gap between GAAP and adjusted second-quarter earnings, substantial belts-related charges, tariff uncertainty, acquisition and divestiture execution risk, and the demanding improvement embedded in the 2028 targets.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets11 analysts · as of 18 Aug 2026

Low · most bearish analyst$129.00

Mean target$147.20

High · most bullish analyst$160.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$129.0023%

Industrial demand weakens, pricing does not fully offset tariffs and operating costs, or acquisition and divestiture execution disappoints. Full-year revenue growth or adjusted EPS falls below guidance, and consolidated margin remains below the 2028 target floor, undermining confidence in the approximately USD 8.50 adjusted-EPS objective.

Base CaseCentral scenario

$147.2058%

Matches the consensus mean

Timken delivers within its 2026 revenue-growth and adjusted-EPS ranges and makes measurable but uneven progress toward the 2028 targets. Industrial Motion remains the principal margin-growth engine, while Engineered Bearings, tariff effects and portfolio-transition costs temper consolidated progress.

Bull CaseUpside scenario

$160.0019%

Demand and pricing remain favorable, Bijur Delimon integration produces the expected commercial and cost synergies, and the belts exit improves Industrial Motion's mix. Timken finishes 2026 near the upper end of its revenue and adjusted-EPS guidance, then reaches the upper portions of its 2028 sales and margin ranges.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Second-quarter 2026 sales increased 7.5%, organic sales increased 4.4%, adjusted EPS increased 28.9%, and management raised its full-year adjusted-EPS outlook.
Consolidated adjusted EBITDA margin increased to 19.6% from 17.7%, while Industrial Motion margin increased to 23.3% from 18.3%.
The Elevate to Outperform plan establishes measurable 2028 targets, while the Bijur Delimon acquisition and planned belts divestiture align capital with higher-priority industrial-motion verticals.

Key Investment Risks

Second-quarter GAAP diluted EPS was USD 0.41 versus adjusted EPS of USD 1.83, with substantial belts-related impairment, restructuring and reorganization charges creating a material adjusted-to-GAAP gap.
The 2028 plan requires consolidated adjusted EBITDA margin to rise to 21%-23% from 17.4% in 2025, making execution, mix improvement and cost control central to the thesis.
Timken identifies demand cyclicality, tariffs, operating-cost inflation, acquisition integration and completion of announced portfolio actions as factors that could cause actual results to differ from its outlook.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.