2022 December 5th Week WBM News Recommendation - Timken: Strong Market Position With Earnings Growth, Technicals Improving

The Industrials sector continues to sport impressive relative gains against the S&P 500 this year.

Għoli makro inċertezza għandu 't deher biex iweġġa ' wieħed domestiku makkinarju kumpanija dan l-aħħar.

I ara aktar rasu potenzjal minn isfel riskju fi ishma ta ' Timken.

The bulls might be pinning their hopes on one important relative strength chart as we head into 2023 – Industrials vs the S&P 500. The Industrial Select Sector SPDR Fund (XLI) is down less than six percentage points in total return in 2022 – producing more than 15 percent of alpha against the broad market.

Dan valur ċikliku parti ta ' is-suq ikompli biex run (vs SPY) minkejja żieda biżgħat ta' a riċessjoni is-sena li jmiss Se wieħed domestiku makkinarju kumpanija tipprovdi qligħ amid ekonomiku inċertezza? Let's iċċekkja out Timken.

Skond lil Bank ta ' Amerika Globali Riċerka , il Timken Kumpanija (NYSE:TKR) huwa l- l-akbar manifattur ta ' tapered roller bearings in l US u a leading globali manifattur ta ' għoli inġinier bearings u qawwa trasmissjoni prodotti. Il kumpanija tiġġenera 50 fil-mija ta ' bejgħ minn tagħha Mobbli Prodotti diviżjoni , li li primarjament tbiegħ bearings għal ġdid tqil tagħmir prodotti , u il proċess Industriji % 2c li huwa aktar wara l-bejgħ misjuq. 55 fil-mija ta ' bejgħ huma minn Tramuntana Amerika.

Il- Ohio-based $5.1 billion market cap Machinery industry company within the Industrials sector trades at a near-market 14.2 trailing 12-month GAAP price-to-earnings ratio and pays a 1.8 percent dividend yield, according to The Wall Street Journal.

On valuation, analysts at BofA see earnings having risen significantly in 2022, then continuing to rise next year and through 2024. The Bloomberg consensus forecast is about on par with what BofA sees. Dividends, meanwhile, should rise commensurate with per-share profit growth as the yield remains about in line with the market's rate.

HMY's forward operating and GAAP earnings multiples are low compared to the broad market and considering the future growth outlook. Finally, I like the free cash flow yield percentage when looking out to 2023 and '24.

Looking ahead, corporate event data from Wall Street Horizon show an unconfirmed Q4 2022 earnings date of Thursday, February 2 BMO. There are no other event dates to stir up volatility though.

TKR pulled back big off its early 2021 peak above $90 to the summer 2022 low just above $50. That downtrend was broken, however, in August then successfully retested in October. Shares recently pulled back from resistance in the mid-$70s – that move came on bearish RSI divergence, so the very near-term trend could be lower.

Notice, though, that the long-term 200-day moving average has turned flat and should begin rising. A breakout above the December peak should help the case for a bullish move back toward the 2021 peak. I'd like to see such a move come on a new high in RSI. Overall, a breakout would imply a bullish measured move price objective to just above $100 based on the previous $25 range.

I like the valuation on TKR while a bearish to bullish reversal on the chart is encouraging. The bulls still have some work to do, however, in order to get the stock above $80 or so.