Timken (TKR.N) Slight 3Q Beat; Organic Growth & Operational Guidance Largely Unchanged

TKR reported 3Q26 adj. EPS of $1.65, above Citi/FactSet Consensus of $1.46/$1.48. TKR did record IEEPA refunds in the quarter, which contributed 13c to the beat. Consolidated revenue of $1,211mn came in ~1% above our model on organic growth of +2.8% vs our +2.5% estimate. Adj. EBITDA margin of 17.5% (backing out IEEPA benefit) came in ~30-bps above our model. TKR raised its 2026 adj. EPS guidance by 23c at the midpoint to a range of $6.35-$6.50; 21c of the raise can be attributed to the net IEEPA refund benefits captured in 3Q26 and lower interest expense. Implied 4Q adj. EPS of $1.27 is relatively in-line with Street estimates. TKR completed the divestiture of the belts business, which the company expects to structurally increase margins of Industrial Motion beginning in 4Q26. We would anticipate a muted reaction for TKR shares following the slight 3Q beat and largely maintained operational guidance.