UPDATE: Bank of America Upgrades Timken Company to Buy; Many Upside Catalysts

Bank of America upgraded Timken Company

from Neutral to Buy and raised the price objective from $54.00 to $70.00. Bank of America commented, "We like the stock as 1) a cyclical recovery story with bottomed out expectations, 2) a well-run, ROIC company that will be further incentivized to deliver value due to continued activist pressure, and 3) a beneficiary of fading pension risk with potential for a steady 8-10% FCF yield post 2014. Timken is trading at 6.7x 2013E EBITDA, a 24% discount to direct Swedish competitor SKF (covered by Ben Maslen). We see 30% potential upside to $70 per share, or 8.5x 2013E EV/EBITDA." Timken Company closed at $54.17 on Friday.