Timken (TKR): Buy, Sell, or Hold Post Q2 Earnings? Anthony Lee Thu, October 8, 2026 at 12:56 PM EDT 3 min read ^GSPC -0.71% TKR -0.80% Trade Timken on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
While the S&P 500 is up 15.2% since April 2026, Timken (currently trading at $114.83 per share) has lagged behind, posting a return of 8.5%. This might have investors contemplating their next move.
We're cautious about Timken. Here are three reasons why there are better opportunities than TKR, plus one stock we'd rather own.
We can better understand Engineered Components and Systems companies by analyzing their organic revenue. This metric gives visibility into Timken's core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Timken failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Timken might have to lean into acquisitions to accelerate growth, which isn't ideal because M&A can be expensive and risky (integrations often disrupt focus).
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Timken's unimpressive 5% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
Unfortunately, Timken's ROIC averaged 4.2 percentage point decreases each year over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.
Timken falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 18.2× forward P/E (or $114.83 per share). This valuation tells us it's a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere. We'd recommend looking at an all-weather company that owns household favorite Taco Bell.
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