Timken (TKR) is benefiting from investor confidence in its revised 80/20-led operating model and "Elevate to Outperform" strategy, with improved visibility on near-term earnings and medium-term targets following a management meeting, Oppenheimer said in a Thursday note.

The analyst said management is focusing resources on higher-growth, higher margin industrial segments while reducing exposure to lower return businesses, including through divestitures, SKU rationalization, and a sharper focus on core verticals where Timken has competitive strength.

Oppenheimer noted that these initiatives are expected to support operating margin expansion through 2028, alongside mid-single-digit organic growth driven by exposure to automation, infrastructure, transportation, aerospace, and electrification trends.

According to the report, the improving short cycle industrial demand, strong free cash flow generation, and disciplined capital allocation through bolt-on M&A and share repurchases support sustained earnings momentum and execution of Timken's long-term strategy.

Oppenheimer maintained its outperform rating on the stock and raised its price target to $147 from $137.

Shares of Timken were down 1% in Friday trading.

Price: 132.25, Change: -1.41, Percent Change: -1.05