Stifel expressed confidence in manufacturer Timken Co (NYSE: TKR) after a meeting with the company's management.
Analyst Stanley Elliott upgraded Timken from Hold to Buy and increased the price target from $52 to $60.
Following two years of organic declines, Timken's end markets have rebounded, Elliott said in a Sunday note. Despite being in recovery mode for five quarters, Timken's market recovery has accelerated only within the past 60 days, the analyst said.
Timken raised its full-year guidance twice in that timeframe, with 12-percent organic growth expected for the full year, Elliott said.
The outlook is supportive of mid-single-digit volume growth into 2019, according to Stifel.
"Pricing recently turned positive for the company in 1Q18 and expectations are that relationship remains through the remainder of the year."
Timken's shares have underperformed the S&P 500 Index by 6 percent over the past year, dragged by cycle, price and cost and margin potential uncertainties , Elliott said. All appear manageable in the near-to-medium term, he said.
Stifel increased its estimates for Timken, citing higher margin assumptions.
The Price Action
Timken shares have added 2.6 percent year-to-date.
The stock was up 0.31 percent at $48.90 at the time of publication Tuesday.
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Photo courtesy of Timken.
Latest Ratings for TKR
|May 2018||Stifel Nicolaus||Upgrades||Hold||Buy|
|May 2018||Bank of America||Maintains||Underperform||Underperform|
|May 2018||Vertical Research||Upgrades||Hold||Buy|
View More Analyst Ratings for TKR
View the Latest Analyst Ratings
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