The Timken Company (TKR) came in ahead of expectations in the most recent report, which is nothing new. Analysts keep raising forecasts, sending shares to a Zacks #1 Rank (Strong Buy) and keeping valuations attractive.
Company Description
Timken makes anti-friction bearings and power transmission products used in all modes of transportation, as well as the energy and industrial industries.
Great Quarterly Report
On Apr 26 Timken announced first-quarter results that showed a 37% jump in revenues, to $1.3 billion. Part of that was due to passing along higher costs, but they also said stronger demand was there.
Income from continuing operations came in at a record-high $112.7 million. That was 27 cents ahead of the Zacks Consensus estimate and marked the seventh consecutive earnings surprise.
Raising the Bar
Timken’s management said the results set the pace for a record breaking year and they raised their full-year outlook. Analysts followed suit, pushing the Zacks Consensus Estimate higher.
Forecasts for this year are averaging $4.10, up 47 cents on the earnings release. Next year’s projections jumped 37 cents and now average $4.63. Last year EPS came in at $2.95, so the expected growth rates are 39% and 13%.
Valuations
After seeing such impressive results, optimism and growth rates you might expect to pay a premium to get into shares of TKR. But the stock is trading at a forward P/E of only 13 times and a PEG ratio at 0.9. Both showing a solid value.
The Chart
It is pretty easy to get lost in the daily noise of the stock market. But if you take a step back and look at the overall earnings trend for TKR you can see a pretty encouraging picture.
Estimates are showing consistent year over year growth and continue to climb significantly through each year.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
TIMKEN CO (TKR): Free Stock Analysis Report
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