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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. The Timken Company's Q4 Earnings: A Strong Finish to 2025

The Timken Company reported a strong fourth quarter, with adjusted earnings per share (EPS) of $1.14, exceeding the high end of the guidance range and beating analyst estimates of $1.09. Total revenue for the quarter was $1.11 billion, up 3.5% from the previous year, driven by higher pricing and volume growth in the Industrial Motion segment. Adjusted EBITDA margins came in at 16%, and free cash flow was $141 million, up from the previous year.

Publication Date: Feb -06

📋 Highlights
  • Q4 Adjusted EPS Surpassed Guidance: Achieved $1.14/share, exceeding the high end of guidance.
  • Free Cash Flow Growth Enabled Shareholder Returns: Generated $141M in Q4, returning $36M to shareholders and reducing debt by $100M.
  • 2026 EPS Guidance Raised: Expects $5.50–$6/share, reflecting 8% growth at midpoint versus 2025.
  • Revenue Growth Driven by Pricing and Volumes: Q4 sales rose 3.5% YoY, with Industrial Motion contributing volume gains and pricing across segments.
  • Backlog and Order Trends Signal 2026 Demand: Order book grew high single digits in off-highway, wind, and aero, supporting higher 2026 revenue guidance.

Revenue Growth and Margin Expansion

The company's revenue growth was driven by higher pricing across both segments and higher volumes in the Industrial Motion segment. Organically, sales were up 1.3% from the previous year. The company's adjusted EBITDA margin expansion was largely due to a mix issue in engineered bearings, and the benefit of cost savings tactics implemented throughout 2025.

Cash Flow Generation and Balance Sheet

The company generated operating cash flow of $183 million in the fourth quarter, and free cash flow was $141 million, up from the previous year. This brought the company's free cash flow to $406 million for the full year, an increase of $100 million from the prior year. The company reduced net debt by over $130 million during 2025 and ended the fourth quarter with net debt to adjusted EBITDA at two times.

Outlook for 2026

The company expects adjusted EPS to increase around 8% at the midpoint of the guidance range in 2026. The company expects full-year revenue to increase 2% to 4% in total, with organic revenue growth expected to be up 2% at the midpoint, driven by higher volumes and pricing in both segments. Consolidated adjusted EBITDA margin is expected to be in the high 17% range at the midpoint, up from 17.4% in 2025.

Valuation Metrics

Using the current stock price, the company's P/E Ratio is 24.66, P/B Ratio is 2.23, and EV/EBITDA is 11.89. The Dividend Yield is 1.36%, and the Free Cash Flow Yield is 5.71%. The Net Debt / EBITDA ratio is 2.36. These metrics suggest that the company's stock is fairly valued, with a reasonable price-to-earnings ratio and a decent dividend yield.

Operational Highlights

Lucian Boldea mentioned that the company is focusing on macro trends like electrification and automation, and is excited about the long-term strategic role of automation within the business. The company is also working on a disciplined operating model with a single version of the truth, transparency, accountability, and metrics. According to Michael Discenza, "We're seeing the benefit of cost savings tactics implemented throughout 2025, and we expect favorable mix in the coming year."

3. NewsRoom

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Channing Capital Management LLC Cuts Stock Position in Timken Company (The) $TKR

Feb -22

Source: defenseworld.net

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Head to Head Comparison: Eastman Kodak (NYSE:KODK) and Timken (NYSE:TKR)

Feb -22

Source: defenseworld.net

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CenterBook Partners LP Buys 8,754 Shares of Timken Company (The) $TKR

Feb -21

Source: defenseworld.net

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The Timken Company (TKR) Presents at Citi's Global Industrial Tech & Mobility Conference 2026 Transcript

Feb -18

Source: seekingalpha.com

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Arnold Van Den Berg's Strategic Moves: MarketAxess Holdings Inc. Takes Center Stage

Feb -17

Source: gurufocus.com

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Timken Declares Quarterly Dividend of 35 Cents Per Share

Feb -13

Source: prnewswire.com

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Timken Awards Scholarships Valued at up to $540,000 to 20 Students Around the World

Feb -12

Source: prnewswire.com

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Harbor SMID Cap Value ETF Q4 2025 Performance Review

Feb -10

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: 6.3/10

Value: 4.3

Growth: 6.0

Quality: 8.2

Yield: 6.0

Momentum: 4.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Timken

A-Score: 5.5/10

Value: 5.8

Growth: 5.0

Quality: 5.2

Yield: 4.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
RBC Bearings

A-Score: 5.3/10

Value: 0.9

Growth: 7.3

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Lincoln Electric

A-Score: 5.3/10

Value: 2.2

Growth: 6.4

Quality: 6.6

Yield: 2.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Toro

A-Score: 4.8/10

Value: 3.9

Growth: 5.4

Quality: 6.0

Yield: 3.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Stanley Black & Decker

A-Score: 4.5/10

Value: 5.1

Growth: 3.1

Quality: 4.2

Yield: 7.0

Momentum: 2.5

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

108.16$

Current Price

108.16$

Potential

-0.00%

Expected Cash-Flows