The Timken Company (NYSE:TKR), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Timken's outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Timken
What's The Opportunity In Timken?
Great news for investors – Timken is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $113.94, but it is currently trading at US$78.92 on the share market, meaning that there is still an opportunity to buy now. However, given that Timken's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Timken?
Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Timken's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since TKR is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you've been keeping an eye on TKR for a while, now might be the time to enter the stock. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy TKR. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
If you want to dive deeper into Timken, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Timken and we think they deserve your attention.
If you are no longer interested in Timken, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
