Zacks Investment Research Downgrades Timken (NYSE:TKR) to Strong Sell

Zacks Investment Research lowered shares of Timken (NYSE:TKR) from a hold rating to a strong sell rating in a report issued on Tuesday morning, Zacks.com reports. Zacks Investment Research currently has $56.00 target price on the industrial products company’s stock.

According to Zacks, “Timken’s third-quarter earnings and sales missed the Zacks Consensus Estimate and improved year over year. Timken projects adjusted earnings per share to be $4.70-$4.75 for 2019. The mid-point of the guidance suggests year-over-year growth of 13%. Though acquisition benefits, positive pricing and strong organic growth in renewable energy, aerospace, marine and rail sectors will likely drive top-line growth, lower demand in off-highway, heavy truck and industrial services is expected to offset these positives. Further, the company is well placed to gain from cost-reduction initiatives, acquisitions and strong free cash flow in the current year. However, inflated raw-material prices on account of the implementation of tariffs and elevated interest expenses due to higher debt levels are likely to dent the company’s margins.”

TKR has been the topic of a number of other research reports. ValuEngine raised Timken from a strong sell rating to a sell rating in a research report on Thursday, October 31st. Goldman Sachs Group raised Timken from a neutral rating to a buy rating and lifted their target price for the company from $55.00 to $56.00 in a research report on Tuesday, July 16th. Morgan Stanley set a $52.00 target price on Timken and gave the company a hold rating in a research report on Friday, November 1st. Finally, Bank of America downgraded Timken from a neutral rating to an underperform rating and set a $41.00 target price on the stock. in a research report on Thursday, September 26th. Three equities research analysts have rated the stock with a sell rating, one has given a hold rating and one has given a buy rating to the company. The company currently has an average rating of Hold and a consensus target price of $51.25.

Shares of TKR traded up $0.17 during midday trading on Tuesday, hitting $53.65. The stock had a trading volume of 660,419 shares, compared to its average volume of 673,236. The company has a 50 day simple moving average of $45.49 and a two-hundred day simple moving average of $45.83. Timken has a twelve month low of $33.98 and a twelve month high of $54.52. The firm has a market cap of $3.97 billion, a price-to-earnings ratio of 12.83, a price-to-earnings-growth ratio of 1.38 and a beta of 1.81. The company has a debt-to-equity ratio of 0.89, a current ratio of 2.57 and a quick ratio of 1.42.

Timken (NYSE:TKR) last released its quarterly earnings results on Wednesday, October 30th. The industrial products company reported $1.14 earnings per share (EPS) for the quarter, missing the Thomson Reuters’ consensus estimate of $1.18 by ($0.04). The firm had revenue of $914.00 million during the quarter, compared to analyst estimates of $945.87 million. Timken had a net margin of 8.11% and a return on equity of 21.12%. The business’s revenue for the quarter was up 3.7% compared to the same quarter last year. During the same period in the prior year, the business earned $1.06 EPS. Analysts forecast that Timken will post 4.72 EPS for the current fiscal year.

In related news, EVP Ronald J. Myers sold 6,484 shares of Timken stock in a transaction dated Thursday, November 7th. The stock was sold at an average price of $53.44, for a total value of $346,504.96. Following the sale, the executive vice president now owns 22,162 shares of the company’s stock, valued at $1,184,337.28. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CAO Shelly Marie Chadwick bought 1,183 shares of the stock in a transaction that occurred on Monday, November 4th. The stock was bought at an average cost of $52.73 per share, for a total transaction of $62,379.59. In the last ninety days, insiders sold 58,143 shares of company stock worth $3,081,427. 11.58% of the stock is owned by company insiders.

A number of institutional investors have recently bought and sold shares of the stock. State of Alaska Department of Revenue grew its holdings in Timken by 3.0% during the second quarter. State of Alaska Department of Revenue now owns 7,635 shares of the industrial products company’s stock worth $391,000 after purchasing an additional 221 shares during the period. Howe & Rusling Inc. grew its holdings in Timken by 5.3% during the third quarter. Howe & Rusling Inc. now owns 5,596 shares of the industrial products company’s stock worth $243,000 after purchasing an additional 282 shares during the period. Creative Planning grew its holdings in Timken by 5.0% during the third quarter. Creative Planning now owns 6,828 shares of the industrial products company’s stock worth $297,000 after purchasing an additional 325 shares during the period. Retirement Systems of Alabama grew its holdings in Timken by 0.4% during the second quarter. Retirement Systems of Alabama now owns 89,107 shares of the industrial products company’s stock worth $4,575,000 after purchasing an additional 339 shares during the period. Finally, Synovus Financial Corp grew its holdings in Timken by 2.4% during the second quarter. Synovus Financial Corp now owns 15,480 shares of the industrial products company’s stock worth $794,000 after purchasing an additional 367 shares during the period. Institutional investors and hedge funds own 78.44% of the company’s stock.

About Timken

The Timken Company engineers, manufactures, and markets engineered bearings and power transmission products worldwide. It operates in two segments, Mobile Industries and Process Industries. The Mobile Industries segment offers a portfolio of bearings, seals, and lubrication devices and systems, as well as power transmission components, engineered chains, augers, belts, couplings, clutches, brakes, and related products and maintenance services to original equipment manufacturers (OEMs) and end users of off-highway equipment for the agricultural, construction, mining, outdoor power equipment, and power sports markets; and on-highway vehicles, including passenger cars, light trucks, and medium- and heavy-duty trucks, as well as rail cars and locomotives.

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