A Fresh Look at Timken (TKR) Valuation Following Updated 2025 Earnings Guidance and Q3 Results

Timken (TKR) just shared its third-quarter and year-to-date results, highlighting a dip in both net income and earnings per share compared to last year. At the same time, the company surprised many by raising its full-year 2025 earnings outlook and offering a somewhat improved revenue forecast.

See our latest analysis for Timken.

Timken’s recent results and upgraded guidance appear to be catching the market’s attention, with the share price rising 2.84% in the past day and gaining 12.33% so far this year. While one-year total shareholder return has been modest at 0.87%, longer-term holders have enjoyed an 18.16% total return over three years. This suggests momentum is building as confidence returns around earnings expectations.

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With shares trading just below analyst targets and profits under pressure, the question for investors is whether Timken is now undervalued or if the market is already factoring in its brighter outlook. Is this a buying opportunity, or is future growth fully priced in?

Most Popular Narrative: 8.6% Undervalued

Timken's widely followed narrative suggests the company’s fair value sits noticeably above its latest closing price. This gap sparks debate about whether Timken’s future performance justifies such a premium.

The company is committed to delivering $75 million in cost savings in 2025. This initiative is expected to counteract inflationary pressures and support margin expansion, positively affecting net margins and earnings. Timken plans to optimize its automotive OEM business portfolio and is targeting more than half for potential divestment or restructuring. This focus is expected to enhance corporate margins starting in 2026 and 2027, contributing to overall earnings growth.

Read the complete narrative.

Curious what makes analysts so confident in Timken? Some bold assumptions about margin expansion and business transformation form the backbone of this valuation. The real surprise is that it all hinges on management’s ability to execute an ambitious cost-saving plan. Want to know the full story behind the numbers? Don’t miss the rest of this narrative.

Result: Fair Value of $85.87 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued softness in key industrial markets and the potential for ongoing tariff impacts could challenge Timken’s ability to fully deliver on its growth story.

Find out about the key risks to this Timken narrative.

Build Your Own Timken Narrative

If these views don't quite fit your perspective, or you'd rather dive deep into the data yourself, it's easy to shape your own narrative in just a few minutes, and you can 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.

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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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