On Monday, Citi made an optimistic move on Timken stock, upgrading it from Neutral to Buy and increasing the price target to $90 up from $85. The firm's decision is based on several factors, including a forecasted rebound in industrial Purchasing Managers' Indexes (PMIs) in the second half of 2025 and the potential for Timken's core machinery end-markets to reach a low point in 2025.
The upgrade reflects Citi's confidence in the stock's potential, particularly as Timken is expected to benefit from the upcoming recovery. The firm also expects that Timken will provide more details on its strategic plans during an investor day, which is anticipated to occur in the latter half of 2025.
Timken, with its new CEO Tarak Mehta at the helm, is poised to outline clearer strategic objectives, which Citi believes will be a catalyst for the company's stock. The firm's analysis suggests that this could be a key event for investors to watch.
Citi also noted the current valuation of Timken's shares as an attractive entry point for investors. According to the firm, Timken has not experienced the same post-election re-rating as other machinery companies, which may offer an opportunity for value.
Overall, Citi's revision of its stance on Timken to a Buy rating, accompanied by a price target increase, signals a positive outlook for the company's performance in the upcoming year, particularly in the second half. The analyst's comments underscore a belief in a likely industrial sector recovery and strategic initiatives from Timken's new leadership to drive growth.
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