Timken (TKR): Assessing Valuation After a Steady Share Price Climb This Year
Timken (TKR) has been quietly grinding higher, with the stock up around 6% over the past month and almost 20% this year, supported by steady revenue growth and improving profitability.
See our latest analysis for Timken.
That recent 6.1% one month share price return has added to Timken’s solid year to date share price gain. With the stock now at $83.21, the overall trend suggests steady momentum rather than a speculative spike, supported by a respectable multi year total shareholder return.
If Timken’s steady climb has you thinking about what else might be quietly gaining ground, this could be a good moment to explore fast growing stocks with high insider ownership.
With earnings still growing and the share price edging closer to analyst targets, the key question now is whether Timken’s solid fundamentals remain underappreciated or if the market has already priced in the next leg of growth.
Most Popular Narrative: 5.3% Undervalued
With Timken last closing at $83.21 against a most popular narrative fair value of about $87.85, the story suggests modest upside driven by execution.
The company is committed to delivering $75 million in cost savings in 2025, which should counteract inflationary pressures and support margin expansion, positively affecting net margins and earnings. Timken plans to optimize its automotive OEM business portfolio, targeting more than half for potential divestment or restructuring.
Curious how steady, low single digit growth assumptions can still back an earnings jump and a richer multiple than today? The narrative leans on a disciplined margin rebuild, shrinking share count and a future valuation usually reserved for faster growing industrials. Want to see exactly how those moving parts add up to that fair value call?
Result: Fair Value of $87.85 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, softer industrial demand and ongoing tariff headwinds could still squeeze margins and derail the steady earnings and valuation re-rating that the narrative anticipates.
Find out about the key risks to this Timken narrative.
Another View: DCF Flips the Story
While the narrative fair value points to upside, the SWS DCF model is far more conservative, putting fair value near $50.34. On this view, Timken at $83.21 screens as materially overvalued and raises the question: are investors overpaying for steady but modest growth?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Timken for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 906 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Timken Narrative
If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.
A great starting point for your Timken research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
Ready for your next investing move?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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