Oppenheimer’s Favorite Stocks For Next 12 Months: Top 32 Stock Picks

18. The Timken Company (NYSE:TKR)

Share Price Upside: 11%

Number of Hedge Fund Investors In Q2 2024: 31

Average Analyst Share Price Target: $94.2

The Timken Company (NYSE:TKR) is an industrial products company that makes and sells items such as ball bearings, lubrication systems, chains, clutches, and brakes. As has been the case with other industrial firms, its share price performance has been rather muted as of late as the stock has posted a modest 14% in gains over the past twelve months. This is because industrial spending in the US has dropped due to high interest rates, but with rate cuts on the horizon, The Timken Company (NYSE:TKR) could benefit from reignited demand. This was clear in August when after the Fed Chairman’s latest comments at Jackson Hall that cemented investor optimism for rate cuts, The Timken Company (NYSE:TKR)’s shares closed 2.6% higher. Additionally, key data points that could provide insights into The Timken Company (NYSE:TKR) future include the ISM’s supply chain survey and labor market surveys to determine the course of an economic uptick. The firm also has important exposure to the renewable energy industry in the form of wind energy products, particularly in China. These could create long term tailwinds, and Oppenheimer concurs as it shares that The Timken Company (NYSE:TKR) s “long-term strategic transition, with the team’s aggressive investments in renewable energy and automation.”

The Timken Company (NYSE:TKR)’s management commented on its renewable energy exposure during the Q2 2024 earnings call when it shared:

“We were — we were flattish, slightly up and win from Q1 to Q2. So we think we’ve certainly bottomed. There is usually a little seasonality from first half to second half, but we have the backlog to stay flattish for the rest of this year. I’d say, it is too early to call next year, tends to be a longer lead time item. So as we get to next quarter’s call, I think we should have a good feel how we are going to at least start the year. But definitely could be up. It’s probably impossible to be up back to peak levels just because of the level we’re operating at. It would take us a while to ramp back up to those levels. So probably the fastest for that would be ’26 or ’27, but yes we could be up next year.”