Timken Co (NYSE:TKR) stock fell 0.41% (As on January 17, 11:28:11 AM UTC-4, Source: Google Finance) after the company upgraded by BofA to Buy from a “neutral” rating in a note issued to investors. The firm presently has a $87.00 price objective on the industrial products company’s stock, up from their prior price objective of $71.00. Bank of America’s price objective suggests a potential upside of 15.28% from the company’s previous close. Rising demand for bearings up to 1,200-mm diameter portends more opportunities for Timken to supply green-energy projects and a greater need for effective CMM inspection. The Timken Co. plant in Dudley, England, recently recorded an increase in demand for large bearings – up to 1,200-mm diameter – for wind turbine construction, and anticipates further growth for such applications as green-energy programs take shape in various parts of the world. The plant is an established manufacturer of engineered bearings for mining equipment, food and beverage processing operations, pulp and paper manufacturing, cement production, marine systems, and wastewater processing. To conduct quality inspections on the larger bearings Timken acquired an Altera 15.12.10 ceramic bridge coordinate measuring machine (CMM), with axis travels of 1,500×1,200×1,000 mm manufactured by LK Metrology.
Meanwhile, the company has reported third-quarter 2022 sales of $1.14 billion, up 9.6 percent from the same period a year ago. The increase was driven primarily by growth across most end-market sectors led by industrial distribution and off-highway, and the impact of higher pricing, partially offset by unfavorable foreign currency translation. Organically, third-quarter sales were up 13.6 percent versus the prior year. The company has delivered adjusted net income in the third quarter was $112.6 million or $1.52 per diluted share, a record for the third quarter. This compares to adjusted net income of $91.0 million or $1.18 per diluted share for the same period in 2021.
Net cash from operations for the third quarter was $145.2 million, and free cash flow was $97.9 million. Timken ended the third quarter with net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at 1.8 times. During the quarter, the company returned $71.8 million of cash to shareholders through dividends and the repurchase of 750 thousand shares of company stock.
Additionally, In September, Timken reached an agreement to acquire GGB Bearings, a global supplier of highly engineered and customized plain bearings and a leader in metal polymer bearings. GGB Bearings revenue is expected to be around $200 million in 2022. The acquisition remains on track to close in the fourth quarter