The Timken Company (TKR)
Valuation Overview•Is The Timken Company Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Fragile underlying quality score of 45/100; weak margins or elevated debt leverage warrant caution.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
TKR struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 12.6%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.2B | +0.2% | +0.6% | +5.5% | +4.8% | |
| EBITDA | $168.6M | — | +1.1% | — | — | |
| Net Income | $105.9M | -18.2% | -10.9% | — | +4.3% | |
| EPS (Diluted) | $1.40 | -17.6% | -9.1% | +2.0% | — | |
| Free Cash Flow | $500K | +32.8% | +12.5% | -2.3% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 20.4% | 30.8% | 30.0% | 29.2% |
| Operating Margin | 12.6% | 13.2% | 13.1% | 12.4% |
| Net Margin | 6.8% | 7.4% | 8.1% | 7.8% |
| FCF Margin | 8.2% | 7.7% | 7.0% | 7.9% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.50 | $1.67 | +11.3% | ||
| Q1'26 | $1.09 | $1.14 | +4.6% | ||
| Q4'25 | $1.25 | $1.37 | +9.6% | ||
| Q3'25 | $1.34 | $1.42 | +6.0% | ||
| Q2'25 | $1.43 | $1.40 | -2.1% | ||
| Q1'25 | $1.08 | $1.16 | +7.4% | ||
| Q4'24 | $1.38 | $1.23 | -10.9% | ||
| Q3'24 | $1.60 | $1.63 | +1.9% |
Total return is +103.6% (1Y), outperforming the benchmark by +78.7%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +65.8% | +56.5% | — |
| 1Y | +103.6% | +78.7% | +2.0% |
| 3YCAGR | +19.3% | -1.0% | +4.8% |
| 5YCAGR | +13.6% | +0.6% | +8.4% |
| 10YCAGR | +16.6% | +2.9% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about The Timken Company (TKR) valuation, health, and returns.
The Timken Company is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -36.8% downside from DCF intrinsic value of $90.02)
The Timken Company has multiple valuation anchors: DCF Intrinsic Value: $90.02 | Peer Relative Fair Value: $242.62 | Wall Street Analyst Target: $138.33 (implying -2.8% upside). A convergence of these signals offers higher conviction.
The Timken Company displays fair financial health with a composite quality score of 45/100, supported by a Altman Z-Score of 3.2 (safe zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 8.5%.
The Timken Company pays a 1.0% dividend yield, covered by a 34% payout ratio with 12 years of growth, supplemented by a 0.6% buyback yield.
The Timken Company's current growth trajectory is Stable. The company achieved +0.2% 1Y revenue growth and -17.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +0.6%.
Wall Street consensus is Buy based on 24 analysts, beating EPS expectations in 67% of recent quarters with a 4-quarter streak. The consensus price target represents a -2.8% change from current levels.
Investment risks for The Timken Company include: -13.4% 1-year max drawdown, high beta (1.51x market volatility). Volatility risk is characterized by a beta of 1.51x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.