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The Timken Company (TKR)
Intrinsic Value (DCF)
Current$93.73
→
Intrinsic$52.94
-44%
$28.17$52.94$100.03
Market implies 18% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $94, the market prices in continued high-teens cash flow growth (18%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $28 → Bull $100. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $68 | $76 | $85 | $95 |
| 10% | $41 | $47 | $53 | $60 |
| 12% | $26 | $30 | $35 | $40 |
| 14% | $17 | $20 | $24 | $28 |
Bull Case
- Bull case ($100) offers 7% upside at 10% growth, 9% discount
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($28) implies 70% downside at 6% growth, 12% discount
- Price reflects 18% growth expectations vs 8% historical — high bar to clear
- Trading 44% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$330.16M
Year 2$356.57M
Year 3$385.09M
Year 4$415.90M
Year 5$449.17M
Terminal$6.61B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$305.70MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.