Timken Co. provided updated financial targets at the Jefferies Global Industrials Conference on September 9, 2026, committing to adjusted EPS of about $8.50 and $1.3 billion in free cash flow generation through 2028.
The Columbus, Ohio-based industrial company also set a goal of 500 basis points of adjusted EBITDA margin expansion, with 150 to 200 basis points expected to come from portfolio actions — specifically its planned sale of the belts business and an exit from automotive original-equipment manufacturing. The remaining margin improvement will derive from organic growth and operational efficiency initiatives, including the rollout of an 80/20 productivity methodology across the enterprise.
First-half 2026 organic sales growth came in at approximately 4%, marking the company's first organic growth in roughly 10 quarters. Second-half organic growth is projected at around 2.5%. Over the longer term, Timken is targeting mid-single-digit organic sales growth through 2028.
Pricing contribution is expected to average about 100 basis points annually under the 2028 outlook, consistent with the five-year average, down from roughly 200 basis points achieved over the prior five years. First-half 2026 pricing contributed about 2% year-over-year.
The belts divestiture is expected to close by the end of the third quarter of 2026. Gates was named as the natural buyer for the belts business. Timken is also reducing its automotive OEM exposure from about 8% of 2025 sales to roughly 4% by 2028, representing an approximate $150 million revenue reduction between now and the end of the decade.
On the 80/20 productivity initiative, about 60% of the enterprise had been trained by the conference date, with 75% revenue coverage expected by the end of September 2026 and full company training targeted by year-end. Financial and margin benefits are expected to begin in the first half of 2027, followed by growth benefits later that year.
CFO Mike Decenzo described the current environment as early innings of an industrial upcycle but noted it would differ from historical patterns. "Timken historically, coming out of an industrial cycle, we'd see almost that V-shaped recovery where we'd see big growth year on year in the first part of an upcycle. We're not seeing that," Decenzo said.
Timken reported net leverage of about 2x at the end of 2025. The company has repurchased approximately 25% of total shares outstanding over the past 10 to 12 years. Decenzo said he still viewed the stock as undervalued, adding that buybacks represent "a pretty good bargain."
Strategic verticals, which account for about 50% of total company sales, grew high single digits year-over-year in Q2 2026. Automation and robotics is projected to grow at a double-digit organic compound annual rate through 2028. Aerospace and defense represents about 12% of sales. Wind business scaled from zero to over $350 million over roughly a decade. Timken noted its product portfolio can address about 25% to 30% of a humanoid robot's bill of materials.
Steve Ribaudo joined as COO from Carrier Global shortly before the conference. Earlier in 2026, Timken acquired Bijur Delimon, a lubrication business.
