JPMorgan initiated coverage of Timken with a Neutral rating and a price target of $80, pointing to reduced cyclicality from diversification but warning that execution under new management and short-cycle exposure remain challenges.
The bank said Timken has steadily moved away from its automotive bearings roots, cutting auto OEM sales to less than 10% of revenue from about 15% a decade ago, while expanding into Industrial Motion and aftermarket services.
That shift has made sales more durable and margins more resilient, supported by local manufacturing in Europe and Asia.
In August, Lucian Boldea was appointed president and chief executive, resolving a leadership succession question.
JPMorgan said investors will now look for evidence of delivery under the new management team. Its earnings forecasts for 2025 and 2026 are 2% to 4% below consensus.
The analysts expect organic growth of about 3%, with margins in the high teens to low 20s. They said near-term risks include integration challenges, cost pressures and swings in short-cycle demand, while strong execution in Motion and new products could provide upside.
JPMorgan set its $80 price target at about 8 times 2026 estimated EV/EBITDA, broadly in line with Timken’s recent average.
Source :
https://www.investing.com/news/stock-market-news/jpmorgan-starts-timken-at-neutral-cites-leadership-shift-and-shortcycle-risks-4239206
